u<** 


V 


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WESTERN   PACIFIC   RAILWAY   COMPANY 


|£lan  anb  Agreement  for  i&eorgant5atton 


DATED  DECEMBER  15,  1915 


Reorganisation    Committee 


ALVIN     W.     KRECH, 

Chairman 
A.    M.    HUNT, 

JAMES    D.    PHELAN, 

GEORGE    WHITTELL, 

DAVID    R.    FORGAN, 

I.    DE  BRUYN, 

C.    LEDYARD    BLAIR, 

FREDERICK    H.    ECKER, 

STARR    J.    MURPHY, 

WILLIAM    A.    READ, 

WILLIAM    SALOMON, 

RICHARD    B.    YOUNG. 


Counsel: 


BYRNE    &.    CUTCHEON, 

NEW    YORK 

CHAS.    S.    WHEELER 
JOHN    F.    BOWIE, 

SAN    FRANCISCO. 


Secretary, 

LYMAN    RHOADES, 

V  ;  {'  37    WALL    STREET, 

NEW   YORK    CITY 


DEPOSITARY,    THE    EQUITABLE    TRUST    COMPANY    OF    NEW    YORK, 
37     WALL    STREET,     NEW    YORK    CITY. 


AGENTS     OF     DEPOSITARY 


I  o 


RST     FEDERAL     TRUST     COMPANY,     SAN    FRANCISCO,     CALIFORNIA 
LLINOIS     TRUST     AND     SAVINGS     BANK,     CHICAGO,      ILLINOIS, 
LD     COLONY     TRUST     COMPANY.     BOSTON,      MASSACHUSETTS. 


He. 


Wasfts-z, 


Western  Pacific  Railway  Company 


PLAN    AND    AGREEMENT    FOR     REORGANIZATION 


INTRODUCTORY  STATEMENT. 

(Not  part  of  Plan  or  Agreement.) 

In  order  to  enable  the  holders  of  certificates  of  deposit  issued  under  the  Western 
Pacific  Railway  Company  First  Mortgage  Five  Per  Cent.  Thirty  Year  Gold  Bonds  Pro- 
tective Agreement,  dated  May  1,  1915,  and  holders  of  Western  Pacific  Railway  Company 
First  Mortgage  Five  Per  Cent.  Thirty  Year  Gold  Bonds  not  deposited  under  said  agree- 
ment, to  judge  of  the  propriety  and  expediency  of  the  annexed  Plan  of  Reorganization  of 
Western  Pacific  Railway  Company,  the  Protective  Committee  acting  under  said  Pro- 
tective Agreement  has  thought  it  best,  in  explanation  of  the  Plan,  to  review  in  this  intro- 
ductory statement,  the  history  of  that  Company  and  of  the  relations  between  it  and  The 
Denver  and  Rio  Grande  Railroad  Company. 

The  Existing  Road,  Its  History,  Location  and  Cost. 

The  Western  Pacific  Railway  Company,  a  California  corporation,  was  organized  in 
the  year  1903.  In  the  year  1911,  it  completed  the  construction  of  a  single  track  line  of 
railway  extending  from  Salt  Lake  City,  Utah,  to  San  Francisco,  California,  the  total 
length  of  the  road  being  926*  miles.  The  road  is  well  located  and  is  constructed  on  a  grade 
which  in  no  place  exceeds  one  per  cent.  The  character  of  the  construction  and  the  location 
and  alignment  of  the  road  are  such  that  the  railway  is  a  first-class  instrument  of  trans- 
portation. 

The  actual  cash  cost  of  constructing  the  road,  including  no  expenditure  not  dis- 
charged by  payment  of  cash  and  allowed  by  the  rules  of  the  Inter-State  Commerce  Com- 
mission, amounted  to  approximately  $77,800,000. 

Sources  From  Which  Funds  for  Construction  Were  Derived. 

The  monies  with  which  the  Western  Pacific  Railway  Company  was  constructed  were 
obtained  from  the  following  sources: 

Proceeds  of  sale  of  First  Mortgage  Bonds $46,243,120.00 

Proceeds  of  sale  of  Second  Mortgage  Bonds 18,750,000.00 

Proceeds  of  sale  of  capital  stock 163,000.00 

Interest  on  trust  funds  deposited  during  construction    1,870,146.00 

Accrued  interest  on  Second  Mortgage  Bonds 52,905.00 

Monies  borrowed  16,408,650.00 

Income  from  operation  pending  construction  used  for  construction 754.353.00 

Total f$84,242,174.00 

*  This  is  the  length  of  the  main  line.  The  Western  Pacific  Company  owns  in  addition  lines  of  about  20  miles 
in  length. 

t  The  difference  between  this  sum  and  the  amount  of  the  monies  spent  for  construction  was  expended  in  pay- 
ing  interest  on   First   Mortgage   Bonds  accruing  after   the  period  of  construction. 


337710 


n. 

Substantially  all  monies  expended  by  the  Western  Pacific,  except  those  derived  from 
the  sale  of  First  Mortgage  Bonds,  interest  on  mortgage  funds  deposited  in  trust  and  ope- 
rating income  were  derived  from  The  Denver  &  Rio  Grande  Eailroad  Company  (the  owner 
of  five-sixths  of  the  stock  of  the  Western  Pacific  Company),  either  through  the  purchase 
by  the  Denver  Company  of  Western  Pacific  Second  Mortgage  Bonds  or  through  loans  made 
directly  to  the  Western  Pacific  Railway  Company  by  the  Denver  Company  or  its  sub- 
sidiaries. 
Status  of  Accounts  Between  the  Western  Pacific  Company  and  the  Denver  Company. 

In  round  figures  the  indebtedness  now  owing  by  the  Western  Pacific  Company  to 
The  Denver  and  Rio  Grande  Railroad  Company  and  its  subsidiaries  computing  interest 
to  February  28th,  1916,  is  as  follows: 

Debt  due  Denver  Company  by  Western  Pacific  Railway  Company : 
Second  Mortgage  Bonds  (all  being  owned  by  Denver  Company) 

Principal  amount $25,000,000 

Interest  accrued  and  unpaid 8,200,000 

Monies  advanced  by  Denver  Company  upon  promissory  notes  or  open 
account 

Principal  amount  17,500,000 

Interest  accrued  and  unpaid  on  notes  and  balances 4,800,000 


Total  : $55,500,000 

The  monies  owed  the  Denver  Company  exceed  the  monies  advanced  not  only  because 
interest  has  accumulated  but  for  the  reason  that  the  Second  Mortgage  Bonds  were  pur- 
chased at  a  discount. 

Condition  of  Denver  Company  After  Completion  of  Western  Pacific  Line. 

When  the  Western  Pacific  Railway  was  completed  in  the  year  1911,  the  credit  of 
The  Denver  and  Rio  Grande  Railroad  Company,  the  principal  stockholder  of  the  Western 
Pacific  Company,  was  practically  exhausted  and  neither  corporation  was  able  to  finance 
the  construction  of  feeders  or  extensions,  although  it  was  recognized  that  in  the  absence 
of  advantageous  traffic  arrangements  with  other  railroads  in  California  such  feeders  and 
extensions  were  essential  to  make  the  Western  Pacific  self-supporting.  Prior  to  the 
completion  of  the  Western  Pacific  line  such  conditions  with  respect  to  transcontinental 
traffic  had  become  established  in  California  that  the  Western  Pacific  has  never  been  able 
to  obtain  a  division  of  interline-charges  yielding  an  adequate  return  for  the  service  per- 
formed in  transporting  freight  originating  upon  other  transcontinental  lines  from  the 
Pacific  Coast  to  Salt  Lake. 

Obligations  Assumed  by  Denver  Company  to  Western  Pacific  Company  and  Its  First 

Mortgage  Bondholders. 

The  Western  Pacific  Railway  was  constructed  at  the  instance  of  the  Denver  Com- 
pany, which  lent  its  credit  to  the  enterprise,  not  only  in  advancing  monies  as  above  out- 
lined but  also  in  guaranteeing  (in  effect)  payment  of  the  interest  on  the  First  Mortgage 
Bonds  of  the  Western  Pacific.  In  order  to  facilitate  the  sale  of  the  First  Mortgage  Bonds 
of  the  Western  Pacific  Company,  The  Denver  and  Rio  Grande  Railroad  Company  (of 


111. 

Colorado)  and  the  Rio  Grande  Western  Railway  Company,  parties  of  the  first  part,  (since 
consolidated  into  the  existing  The  Denver  and  Rio  Grande  Railroad  Company,  of  Colo- 
rado and  Utah),  the  Western  Pacific  Railway  Company,  party  of  the  second  part,  and 
the  Bowling  Green  Trust  Company,  Trustee  under  the  Western  Pacific  First  Mortgage, 
party  of  the  third  part,  entered  into  an  agreement  dated  June  23,  1905  (commonly 
known  and  herein  referred  to  as  "Contract  B")  by  the  provisions  of  which  The  Denver 
and  Rio  Grande  Railroad  Company  and  the  Rio  Grande  Western  Railway  Company, 
parties  of  the  first  part,  undertook  and  agreed  to  loan  to  the  Western  Pacific  Railway 
Company  sums  which,  together  with  the  earnings  of  that  corporation,  would  be  suffi- 
cient to  enable  it  to  meet  its  operating  expenses  and  taxes  and  to  make  the  payments 
of  interest  and  sinking  fund  monies  called  for  by  the  First  Mortgage  Bonds  of  the  West- 
ern Pacific  Railway  Company  and  the  Mortgage  securing  the  same.  This  contract  con- 
tained provisions  by  which  The  Denver  and  Rio  Grande  Railroad  Company  and  the 
Rio  Grande  Western  Railway  Company  undertook  to  pay  to  the  Trustee  of  the  mortgage 
securing  the  First  Mortgage  Bonds  of  the  Western  Pacific  Railway  Company  a  sum 
which,  together  with  the  amount  actually  appropriated  and  paid  over  by  the  Western 
Pacific  Railway  Company  for  that  purpose,  would  be  sufficient  to  discharge  as  the  same 
accrued  the  interest  payable  upon  the  First  Mortgage  Bonds  of  the  Western  Pacific 
Railway  Company.  The  Denver  and  Rio  Grande  Railroad  Company  in  1908  assumed 
the  obligations  of  its  predecessors  under  Contract  B  and  also  guaranteed  the  payment 
of  interest  upon  many  of  the  then  outstanding  Western  Pacific  First  Mortgage  Bonds 
by  endorsement  on  the  bonds  themselves.  Bonds  in  the  principal  amount  of  about  thirty- 
seven  million  dollars  are  thus  endorsed.  The  Committee,  however,  is  advised  by  counsel 
that  this  endorsement  does  not  add  materially  to  the  obligation  assumed  by  Contract  B. 

Defaults  in  Payment  of  Interest. 

On  March  1,  1915,  the  Western  Pacific  Company  defaulted  in  the  payment  of  the 
interest  then  due  on  its  First  Mortgage  Bonds  and  the  Denver  Company  failed  to  per- 
form its  obligations  with  respect  thereto.  Shortly  thereafter  The  Equitable  Trust 
Company  of  New  York,  as  substituted  Trustee  under  the  mortgage  securing  Western 
Pacific  First  Mortgage  Bonds,  commenced  proceedings  for  the  foreclosure  of  the  First 
Mortgage  in  the  United  States  District  Court  for  the  Northern  District  of  California 
and  Mr.  Frank  G.  Drum  and  Mr.  Warren  Olney,  Jr.,  were  appointed  Receivers  of  the 
Western  Pacific  Railway  Company.  On  September  1,  1915,  default  again  occurred  in  the 
payment  of  the  interest  which  on  that  day  became  due  upon  Western  Pacific  First  Mort- 
gage Bonds.  Another  like  default  must  occur  on  March  1,  1916.  The  principal  of  the 
$50,000,000  of  bonds  has  been  declared  due  and  payable  forthwith.  The  total  amount  of 
interest  which  will  be  due  and  unpaid  March  1, 1916,  is  $3,750,000. 

Effect  of  Foreclosure  Upon  Rights  Arising  Under  Contract  B. 

The  effect  of  the  sale  of  the  properties  of  the  Western  Pacific  Company  on  foreclosure 
will  be  to  free  the  Western  Pacific  property  in  the  hands  of  the  purchaser  from  obliga- 
tions of  the  Western  Pacific  Company  to  the  Denver  Company.  In  other  words,  fore- 
closure will  result  (unless  the  Denver  Company  purchase  the  Western  Pacific  prop- 
erty at  foreclosure  sale  or  some  other  person  or  corporation  purchase  it  for  more 
than  the  amount  due  upon  the  Western  Pacific  First  Mortgage  bonds)  in  a  direct  loss  to 
the  Denver  Company  of  its  entire  investment  in  the  property,  an  investment  which  is 
now  represented  by  a  debt  of  about  $55,500,000.     On  the  other  hand,  the  Committee  is 


IV. 

advised  that  the  foreclosure  sale  will  not  operate  to  discharge  the  obligations  of  the  Den 
ver  Company  to  the  Western  Pacific  bondholders  except  to  the  extent  that  monies  real- 
ized from  the  sale  are  applied  to  the  payment  of  the  bonds  or  bonds  are  used  to  pay  the 
purchase  price. 

Situation  of  Western  Pacific  Bondholders. 

The  situation,  therefore,  of  the  Western  Pacific  Bondholder  is  peculiar.  He  Las  a 
claim  against  the  Western  Pacific  Company  and  has  the  right  to  have  the  property  of  that 
Company  sold  and  the  proceeds  applied,  so  far  as  the  same  will  go,  in  discharge  of  his 
claim.  He  has  also  a  claim  against  the  Denver  Company  for  unpaid  interest  and  will 
have  a  claim  for  interest  to  accrue  on  the  portion  of  his  debt  not  discharged  by  applica- 
tion of  the  proceeds  of  the  sale  of  the  properties  of  the  Western  Pacific  Company.  Prob- 
ably, moreover,  the  Trustee  under  the  Western  Pacific  First  Mortgage,  if  it  elect  to  adopt 
that  alternative,  may  recover  judgment  against  the  Denver  Company  for  all  of  the  dam- 
ages suffered  by  the  First  Mortgage  bondholders  by  reason  of  the  Denver  Company's 
breach  of  its  obligation  under  Contract  B,  considered  as  an  entirety.  This  makes  the 
question  of  the  financial  responsibility  of  the  Denver  Company  a  matter  of  interest  and 
importance  to  the  Western  Pacific  bondholders. 

Indebtedness  and  Earnings  of  The  Denver  &  Rio  Grande  Railroad  Company. 

The  secured  debt  of  the  Denver  Company  as  the  same  now  exists  (it  has  substantially 
no  floating  debt)  is  substantially  the  following: 

Bonds  secured  by  the  First  Consolidated  Mortgage  of  The  Denver  and  Rio 

Grande  Railroad  Company  (of  Colorado)  dated,  June  15,  1886 $40,507,000 

Bonds  secured  by  the  Improvement  Mortgage  of  The  Denver  and  Rio  Grande 

Railroad  Company   (of  Colorado),  dated  June  1,  1888 8,335,000 

Bonds  secured  by  First  Trust  Mortgage  of  The  Rio  Grande  Western  Railway 

Company,  dated  July  1,  1889 15,190,000 

Bonds  secured  by  First  Consolidated  Mortgage  of  Rio  Grande  Western  Rail- 
way Company,  dated  April  1,  1889 15,080,000 

Bonds  secured  by  First  Mortgage  of  Utah  Central  Railroad  Company,  dated 

January  1,  1898 390,000 

Bonds  secured  by  First  and  Refunding  Mortgage  of  The  Denver  and  Rio 

Grande  Railroad  Company  (of  Colorado  and  Utah),  dated  Aug.  1,  1908    *33,292,000 

Bonds  secured  by  Adjustment  Mortgage  of  The  Denver  and  Rio  Grande 

Railroad  Company  (of  Colorado  and  Utah),  dated  May  1,  1912 10,000,000 

Equipment  Trust  Obligations  secured  by  Equipment  Trust  Mortgage,  dated 

September  1,  1907 300,000 


Total  $123,094,000 

The  net  income  of  the  Denver  Company  for  the  past  four  years  (after  deducting  its 
bond  interest  and  taxes)  is  shown  by  the  following  table  compiled  from  the  records  of 
that  Company : 


*  This  amount  does  not  include  $7,005,000  bonds  of  this  issue  which  are  pledged  under  the  Denver  Company's 
Adjustment  Mortgage. 


For  year  ended  June  30th,     1912        1913         1914         1915 

Net  Income  $1,144,763.33   $2,094,179.66   $1,400,375.29   $1,418,730.58 

Appropriations  from  In- 
come, 

For     Sinking     &    Re- 
newal  Funds 137,843.81  247,807.92  263,888.82  273,044.89 

For  Additions  &  Bet- 
terments      389,000.00  80,927.52  211,045.46 

Total  Appropria- 
tions           137,843.81  636,807.92  344,816.34  484,090.35 

Balance  of  Income  trans- 
ferred to  credit  of  Profit 
&  Loss $1,006,919.52       $1,457,371.74       $1,055,558.95  $934,640.23 

The  net  earnings  of  the  Denver  Company  during  the  five  months  of  the  current 
year — July  to  November  inclusive — have  substantially  increased  as  compared  with  the 
earnings  of  the  corresponding  months  of  1914.  The  Company's  business  during  these 
months  has,  however,  been  favorably  affected,  to  some  extent,  by  special  and  temporary 
conditions. 

Present  Condition  and  Prospects  of  the  Western  Pacific  Railway  Company. 

The  assets  of  the  Western  Pacific  Railway  Company  now  in  the  hands  of  receivers 
consist,  principally,  of  physical  properties,  the  reproduction  value  of  which  your  Com- 
mittee believes  to  be  at  least  $75,000,000.  It  is  estimated  that  the  receivers  will  have 
on  hand  at  the  date  of  sale  at  least  $600,000  in  cash  or  its  equivalent  for  the  purposes  of 
the  proposed  reorganization.  Since  the  completion  of  the  line  in  1911  the  Western  Pacific 
Railway  Company  has  reported  earnings  over  and  above  the  cost  of  operation,  mainte- 
nance and  taxes  as  follows: 

June  30,  1912 $    564,214.06 

June  30,  1913 1,040,330.07 

June  30,  1914 321,506.95 

The  Receivers'  report  for  the  year  ending  June  30,  1915,  showed  a  net  income  of 
$617,258.44. 

The  earnings  of  the  Western  Pacific  for  the  past  five  months  are  considerably 
larger  than  those  for  the  corresponding  period  of  1914,  but  cannot  be  considered  an  abso- 
lutely fair  criterion  of  the  present  earning  power  of  the  corporation.  During  those 
months  conditions,  the  character  of  which  are  temporary  (such  as  travel  incident  to  the 
Panama-Pacific  Exposition)  have  contributed  to  the  earnings  of  the  Company. 

The  Protective  Committee  has  taken  the  advice  of  expert  engineers  and  railroad 
operators  with  respect  to  the  problem  of  rendering  the  Western  Pacific  enterprise  self- 
supporting.  It  has  consulted,  particularly,  Mr.  Joseph  H.  Young,  now  President  of  the 
Norfolk  Southern  Railroad,  who  is  thoroughly  familiar  with  operating  and  traffic  con- 
ditions in  Western  Pacific  territory.  It  has  also  had  the  benefit  of  two  reports  dealing 
with  the  earnings  and  properties  of  the  Western  Pacific  Company  and  the  proper  devel- 
opment of  those  properties,  both  of  which  were  prepared  prior  to  the  organization  of  the 
Protective  Committee— one  (by  Mr.  B.  F.  Bush  and  Mr.  E.  L.  Brown)  having  been  pre- 
pared at  the  instance  of  the  Denver  Company  and  the  other  (by  Mr.  John  F.  Stevens)  at 


VI. 

the  instance  of  the  bankers  who  originally  marketed  the  Western  Pacific  First  Mortgage 
Bonds.  The  conclusions  of  the  Committee  with  respect  to  needed  improvement,  equip- 
ment and  extension  of  Western  Pacific  lines  and  the  results  that  reasonably  may  be  ex- 
pected therefrom  are  based  almost  wholly  upon  views  in  which  all  of  the  gentlemen 
named  seem  to  be  in  substantial  agreement.  This  is  particularly  true  with  respect  to 
the  advisability  of  constructing  lines  or  otherwise  acquiring  facilities  in  the  San  Joaquin 
Valley  and  Delta  and  in  the  Santa  Clara  Valley  in  California,  also  with  respect  to  the 
larger  items  of  betterments  of  the  existing  line  and  of  additional  property,  particularly 
equipment,  to  be  acquired  for  use  in  connection  therewith.  Upon  the  basis  of  traffic  now 
carried  by  the  Western  Pacific  (that  is  to  say,  without  allowance  for  any  additional  busi- 
ness), the  proposed  expenditures  for  new  equipment  and  for  betterments  of  existing  facili- 
ties should  so  increase  the  net  earnings  of  the  Company  that  they  will  amply  provide  for 
the  interest  to  accrue  upon  the  $20,000,000  principal  amount  of  New  Bonds  to  be  issued  as 
provided  in  the  Plan. 

Purposes  and  General  Considerations. 

The  Protective  Committee  purposes,  if  it  be  practicable  to  do  so  at  a  proper  price, 
that  the  Reorganization  Committee,  directly  or  through  a  nominee  or  nominees,  shall 
acquire  the  properties  of  the  Western  Pacific  Company  on  behalf  of  the  holders  of  such 
of  the  First  Mortgage  bonds  as  shall  be  subject  to  the  Plan  and  Agreement  of  Reorgan- 
ization, using  the  bonds  under  its  control,  so  far  as  permissible,  in  payment  of  the  pur- 
chase price,  that  the  properties  so  acquired  shall  thereupon  be  transferred  to  a  new 
corporation  (the  proposed  Operating  Company)  and  securities  issued  and  disposed  of  by 
that  company  and  the  proposed  Holding  Company,  as  set  forth  in  the  annexed  Plan. 

The  Protective  Committee  has  at  all  times  kept  in  view  the  value  attaching  to  the 
claims  against  the  Denver  Company  to  be  acquired  as  contemplated  by  the  Plan  and 
therefore  has  designed  in  the  Plan  and  Agreement  to  provide  the  Reorganization  Com- 
mittee and  later  the  Holding  Company  with  powers  and  means  to  pursue  the  claims 
against  the  Denver  Company  that  shall  become  subject  to  the  Plan  and  Agreement  in 
order  that  as  much  as  possible  may  be  realized  (whether  by  negotiation  or  suit  or  both) 
on  the  obligations  of  that  Company  under  Contract  B  and  under  its  endorsed  guaranties. 
Since  the  formation  of  the  Protective  Committee  no  negotiations  with  the  Denver  Com- 
pany have  taken  place  and  no  understanding  of  any  kind  with  respect  to  any  settlement 
or  adjustment  of  its  obligation  exists  in  any  form.  The  financial  condition  of  the  Denver 
Company  is  such  that  it  has  seemed  possible  that  it  may  become  necessary  for  the  Hold- 
ing Company  to  take  measures  to  protect  its  claim  against  the  Denver  Company,  and  for 
that  reason  provision  is  made  in  the  plan  for  the  raising  of  funds,  if  necessary  to  pre- 
vent the  extinguishment  by  means  of  the  possible  foreclosure  of  mortgages  upon  the  Den- 
ver Company's  property  of  the  claims  to  be  acquired  by  the  Holding  Company.  The 
Adjustment  Mortgage  of  the  Denver  Company,  under  which  there  are  outstanding 
$10,000,000,  principal  amount,  of  Adjustment  Mortgage  Bonds,  is  now  in  default  (although 
the  interest  on  these  bonds  has  been  regularly  paid)  by  reason  of  the  failure  to  pay  inter- 
est upon  Western  Pacific  First  Mortgage  Bonds,  and,  should  this  Adjustment  Mortgage 
be  foreclosed,  the  Refunding  Mortgage  of  the  Denver  Company  securing  bonds  in  the 
principal  amount  of  more  than  $33,000,000.00  (exclusive  of  about  $7,000,000  thereof 
pledged  under  the  Adjustment  Mortgage)  may  come  into  default.  For  the  same  reason 
and  because  of  the  position  that  the  Western  Pacific  property  occupies  in  relation  to 
other  railway  properties  and  the  resulting  necessity  of  protecting  its  traffic  relations,  the 
Protective  Committee  has  deemed  it  extremely  important  that  power  shall  exist  also  to 


Vll. 

make  use  of  a  portion  of  the  proceeds  of  the  $20,000,000  of  New  Bonds  in  such  manner 
as  may  seem  to  the  Reorganization  Committee  prior  to  the  completion  of  the  reorganiza- 
tion and  thereafter  to  the  Board  of  Directors  of  the  Holding  Company  most  advantageous 
in  the  interest  of  the  reorganization.  Accordingly  in  clause  (b)  of  Article  V  of  the  Plan 
reasonable  latitude  in  the  application  of  a  portion  of  the  moneys  to  be  raised  has  been 
provided  for. 

The  necessity  of  providing  for  a  common  agency  for  the  enforcement  and  protection 
of  the  claims  against  the  Denver  Company  and  of  raising  funds  if  needed  for  this 
purpose  is  one  of  the  reasons  for  the  formation  of  the  Holding  Company.  This  arrange- 
ment is  supported  also  by  other  reasons,  such  as :  the  possibility  that  after  more  careful 
consideration  it  may  be  thought  necessary  or  wise  to  organize  separate  corporations  for 
the  operation  of  the  railway  in  the  states  of  California,  Nevada  and  Utah  respectively,  in 
which  event  a  common  ownership  of  their  stocks  will  be  necessary;  the  fact  that  a  very 
burdensome  stockholders'  liability  attaches  to  stock  in  any  California  corporation,  a  lia- 
bility which  might  seriously  interfere  with  the  saleability  and  consequently  impair  the 
market  value  of  the  stock  of  the  Operating  Company,  if  in  the  hands  of  the  public;  and 
the  further  fact  that  under  the  laws  of  California  a  majority  of  the  directors  of  the 
Operating  Company  must  reside  in  that  State,  although  more  than  three-quarters  of  the 
new  stockholders  will,  at  least  at  the  time  of  the  completion  of  the  reorganization,  be 
residents  of  other  sections  of  the  country  and  be  entitled  to  insist  upon  direct  representa- 
tion in  the  determination  of  the  general  policies  and  the  management  of  the  financial 
affairs  of  the  reorganized  company.  It  is  possible,  nevertheless,  that  the  conditions  which 
call  for  the  creation  of  a  holding  company  will  not  be  of  indefinite  duration  and  that 
the  stock  of  the  Operating  Company  may  within  a  reasonably  short  time  be  distributed 
among  the  stockholders  of  the  Holding  Company. 

Statements  Not  to  be  Taken  as  Representations,  and  Mistakes  and  Errors  Not  to  Form 

Ground  for  Complaint. 

The  statements  contained  in  this  Introductory  Statement,  whether  of  fact  or  opinion, 
have  been  based  upon  such  information  and  advice  as  have  been  available  and  are  believed 
to  be  substantially  correct,  but  no  such  statement  is  intended  or  is  to  be  taken  to  be  a  repre- 
sentation of  fact  or  law  or  an  inducement  to  any  action  or  omission  to  act.  This  Intro- 
ductory Statement  does  not  constitute  in  any  sense  a  part  of  the  Plan  or  of  the  Agree- 
ment hereto  annexed.  No  error  or  misstatement  herein  of  any  description  shall  consti- 
tute ground  for  the  withdrawal  of  any  Depositor  from  the  Plan  and  Agreement  or  for 
any  complaint  with  respect  to  the  Plan  and  Agreement  or  to  any  consequences  arising 
from  having  become  a  party  thereto. 


PLAN  OF  REORGANIZATION 
I. 

TERMINOLOGY  USED  IN  THE  PLAN  AND  AGREEMENT. 

In  the  following  Plan  and  Agreement  certain  convenient  terms  are  employed  to 
obviate  the  repetition  of  awkward  forms  of  reference.  The  terms  and  their  respective 
meanings,  except  where  a  different  meaning  is  plainly  indicated  by  the  context,  are  the  fol- 
lowing : 

The  "Old  Company"  signifies  the  existing  Western  Pacific  Railway  Company. 

The  "Denver  Company"  signifies  the  existing  The  Denver  and  Rio  Grande  Railroad 
Company,  a  consolidated  corporation  of  Colorado  and  Utah. 

The  term  "Operating  Company"  refers  to  a  proposed  new  corporation  to  be  organ- 
ized (probably  under  the  laws  of  the  State  of  California)  for  the  purpose  of  owning  and 
operating  the  existing  lines  of  Western  Pacific  Railway  Company  and  proposed  exten- 
sions thereof.  In  the  discretion  of  the  Reorganization  Committee  two  or  more  corpo- 
rations may  be  organized  for  this  purpose,  as  may  seem  most  advantageous  having 
regard  to  laws  of  the  states  of  California,  Nevada  and  Utah,  respectively.  The  term 
"Operating  Company"  wherever  used  in  this  Plan  is  to  be  understood  to  comprehend 
whatever  corporation  or  corporations  may  be  employed  for  the  purposes  stated,  as  finally 
determined  by  the  Reorganization  Committee. 

The  term  "Holding  Company"  refers  to  a  proposed  new  corporation,  to  be  organ- 
ized under  the  laws  of  such  state  as  may  be  selected  by  the  Reorganization  Committee, 
for  the  purpose  of  owning  and  holding  all  of  the  capital  stock  of  the  Operating  Company 
(except  directors'  qualifying  shares)  and  of  holding  and  enforcing  or  otherwise  realiz- 
ing upon  claims  against  the  Denver  Company  acquired  from  Depositors  as  provided 
in  the  Plan  and  Agreement  and  existing  or  to  arise  either  under  the  contract,  known 
as  "Contract  B"  (an  agreement  dated  June  23,  1905,  between  (a)  the  former  The  Den- 
ver and  Rio  Grande  Railroad  Company  and  Rio  Grande  Western  Railway  Company, 
predecessors  of  the  Denver  Company,  and  (b)  the  Old  Company  and  (c)  the  Trustee 
under  its  First  Mortgage),  which  in  effect  guarantees  the  payment  of  interest  upon  the 
Old  Company's  existing  First  Mortgage  Bonds  or  under  formal  guaranties  stamped  upon 
certain  of  the  Old  Company's  First  Mortgage  Bonds. 

The  term  "Contract  B"  refers  to  the  above-mentioned  agreement  dated  June  23, 
1905. 

The  term  "Old  Bonds"  refers  to  the  existing  First  Mortgage  Five  Per  Cent.  Thirty- 
Year  Gold  Bonds  of  the  present  Western  Pacific  Railway  Company. 

The  term  "New  Bonds"  refers  to  new  First  Mortgage  Five  Per  Cent.  Bonds  which 
it  is  proposed  shall  be  issued  by  the  Operating  Company. 

The  term  "New  Mortgage"  refers  to  the  mortgage  which  is  to  be  created  to  secure 
the  New  Bonds. 

The  term  "Protective  Committee"  refers  to  the  Committee  mentioned  in  the  annexed 
agreement,  representing  holders  of  Western  Pacific  Railway  Company  First  Mortgage 


Five  Per  Cent.  Thirty -Year  Gold  Bonds,  which  is  acting  under  an  agreement  dated  May 
1,  1915. 

The  term  "Protective  Agreement"  refers  to  the  last-mentioned  agreement  of  May 
1,  1915. 

The  term  "Plan  and  Agreement"  refers  to  this  Plan  of  Reorganization  and  the 
annexed  Agreement,  the  same  being  taken  together  as  a  single  instrument. 

The  term  "Reorganization  Committee"  refers  to  the  Committee  constituted  by  the 
Plan  and  Agreement,  as  the  same  may  be  constituted  at  the  time  referred  to. 

The  term  "Depositary"  refers  to  the  depositary  that  shall  be  acting  hereunder  at  the 
time  referred  to. 

The  term  "Depositors"  signifies  holders  at  the  time  referred  to  of  certificates  of 
deposit  issued  under  the  Protective  Agreement  or  under  the  Plan  and  Agreement  and 
all  holders  of  Old  Bonds  which  shall  be  subject  to  the  Plan  and  Agreement  and  the  term 
shall  be  construed  to  include  not  only  persons  acting  in  their  own  right,  but  also  trus- 
tees, guardians,  committees,  agents  and  all  persons  acting  in  a  representative  or  fiduci- 
ary capacity,  and  those  represenetd  by  or  claiming  under  them,  and  partnerships,  asso- 
ciations, joint-stock  companies  and  corporations  as  well  as  individuals. 

The  term  "Deposited  Bonds"  refers  to  all  Old  Bonds  that  shall  at  the  time  re- 
ferred to  be  subject  to  the  Plan  and  Agreement. 

The  phrase  "claims  against  the  Denver  Company"  or  any  expression  of  like  im- 
port, unless  inconsistent  with  the  context,  shall  be  deemed  to  refer  to  and  comprehend 
all  claims,  demands  and  choses  in  action  and  all  rights  of  every  description,  susceptible 
of  transfer  (whether  in  law  or  in  equity)  as  contemplated  by  the  Plan  and  Agreement, 
against  or  enforceable  against  or  with  respect  to  The  Denver  and  Rio  Grande  Railroad 
Company  or  any  predecessor  or  successor  corporation  or  any  of  the  property  or  estate 
of  said  Company  or  of  any  such  predecessor  or  successor  corporation,  which  have  arisen 
or  exist  or  may  arise  or  exist  in  favor  of  or  be  enforceable  by  or  on  behalf  or  for  the 
benefit  of  holders,  past,  present  or  future,  of  Deposited  Bonds  or  coupons,  whether  under 
or  by  virtue  of  Contract  B  or  any  guaranty  or  guaranties  of  payment  of  interest  endorsed 
upon  any  of  such  Deposited  Bonds  or  under  or  by  virtue  of  any  provision  of  the  Mort- 
gage securing  the  Old  Bonds  or  otherwise  by  virtue  of  ownership  of  or  any  interest  in 
the  Deposited  Bonds  or  coupons. 

The  term  "Underwriting  Syndicate"  refers  to  a  Syndicate  which  has  been  organ- 
ized to  purchase  such  of  the  New  Bonds  as  shall  not  be  purchased  by  Depositors,  to- 
gether with  shares  of  stock  in  the  Holding  Company,  as  provided  in  subdivision  (B)  of 
Article  IX  of  this  Plan. 

II. 

THE  REORGANIZATION  COMMITTEE— DEPOSITARY. 

Inasmuch  as  the  Protective  Committee  already  represents  a  very  large  majority 
of  the  Old  Bonds — the  only  securities  of  the  Old  Company  which  are  expected  to  par- 
ticipate in  the  benefits  or  execution  of  the  Plan — that  Committee  is  to  be  continued  with 


its  present  membership  as  the  Reorganization  Committee  which  will  be  charged  with 
the  supervision  and  direction  of  the  proceedings  for  the  execution  of  the  Plan  and  Agree- 
ment, with  the  powers  more  specifically  set  forth  in  the  annexed  Agreement.  Pending 
the  completion  of  the  reorganization,  if  in  its  judgment  occasion  shall  require,  it  may 
exercise,  but  only  upon  the  affirmative  vote  of  three-fourths  of  all  of  its  members,  any  of 
the  powers  which  the  Plan  contemplates  shall  be  exercised  by  the  Holding  Company  or 
by  the  Operating  Company;  but  any  compromise  or  settlement  of  claims  against  the 
Denver  Company  made  by  the  Reorganization  Committee  under  the  power  last  con- 
ferred, shall  be  made,  and  shall  be,  subject  to  the  condition  that  such  compromise  or 
settlement  shall  be  submitted  to  the  Depositors  as  provided  in  the  annexed  Agreement 
and  shall  not  be  disapproved  in  the  manner  therein  provided  by  more  than  one-third 
in  amount  thereof. 

The  Reorganization  Committee  is  to  be  composed  of  the  following  persons: 

A.  M.  Hunt  Fkederick  H.  Ecker 

James  D.  Phelan  Alvin  W.  Krech 

Geoege  Whittell  Starr  J.  Murphy 

David  R.  Forgan  William  A.  Read 

I.  de  Bruyn  William  Salomon 

C.  Ledyard  Blair  Richard  B.  Young 

Members  may  be  added  to  this  Committee  and  substitutes  for  any  of  the  members  of 
the  Committee  who  may  die,  resign  or  become  incapacitated  to  act  may  be  appointed — all 
as  provided  in  the  annexed  Agreement. 

The  Reorganization  Committee  is  empowered  to  delegate  the  execution  of  the  Plan 
to  a  sub-committee  or  Board  of  Managers,  which  in  its  discretion  may  be  appointed  by  the 
Reorganization  Committee. 

Subject  to  the  power  of  the  Reorganization  Committee,  to  make  a  different  arrange- 
ment, The  Equitable  Trust  Company  of  New  York  will  act  as  Depositary  under  the  Plan 
and  Agreement. 

III. 

NEW  CORPORATIONS— FORECLOSURE  AND  PURCHASE  OF  PROPERTY. 

The  reorganization  of  the  old  Company  is  to  be  effected,  subject  to  the  power  of 
the  Reorganization  Committee,  in  its  absolute  discretion,  to  vary  details  of  method, 
through  the  agency  of: 

(a)  A  new  corporation  or  several  corporations  (called  hereafter,  whether  even- 
tually one  or  more,  the  "Operating  Company")  which  when  the  reorganization  is 
complete  will  be  vested  with  the  title  to  and  will  operate  the  Western  Pacific  property, 
(providing  the  Reorganization  Committee  shall  be  able  to  purchase  or  arrange  for  the  pur- 
chase of  the  same  at  a  proper  price),  and  as  well  all  additions  thereto  and  exten- 
sions   thereof.      It   is    expected    that   the    Operating  Company  will  receive  and  expend 


the  new  moneys  provided  for  in  this  plan  except  such  as  are  required  for  expenses 
of  foreclosure  and  reorganization  and  for  the  payment  of  the  distributive  shares  of  non- 
assenting  bondholders.  It  will  issue  the  New  Bonds  provided  for  in  the  plan  and  create 
the  New  Mortgage  securing  them. 

(b)  A  corporation  (called  herein  the  "Holding  Company")  which  upon  completion 
of  the  reorganization  will  own  (1)  all  of  the  stock  of  the  Operating  Company,  except 
directors'  qualifying  shares,  (2)  the  interest  in  any  deficiency  judgment  against  the  Old 
Company  apportionable  to  Deposited  Bonds  and  (3)  the  claims  against  the  Denver  Com- 
pany arising  under  Contract  B  with  respect  to  interest  upon  Deposited  Bonds  or  under 
any  guaranties  endorsed  on  Deposited  Bonds.  It  will  issue  to  the  Beorganization  Com- 
mittee or  its  nominees  its  preferred  and  common  stock  to  be  exchanged  for  Deposited 
Bonds  or  sold  with  new  bonds  to  an  Underwriting  Syndicate  or  disposed  of  otherwise 
as  hereinafter  provided. 

The  instrumentalities  and  methods  to  be  employed  to  effect  the  reorganization  are 
to  be  determined  by  the  Beorganization  Committee  in  its  absolute  discretion,  provided 
that  in  substance  the  results  contemplated  by  the  Plan  and  Agreement  shall  be  accom- 
plished. 

In  effecting  the  purchase  of  the  property  of  the  old  Company  the  Beorganization 
Committee  will  use,  to  such  extent  and  in  such  manner  as  may  be  necessary  and  prac- 
ticable, the  Deposited  Bonds  and  money  to  be  provided  by  calls  upon  purchasers  of  new 
bonds,  whether  Depositors  or  members  of  the  Underwriting  Syndicate. 


5 
IV. 

SECURITIES  AND  OBLIGATIONS  OF  OLD  COMPANY. 

The  stock,  bonds  and  other  obligations  of  the  Old  Company  are  substantially  the  fol- 
lowing and  are  to  be  refunded,  paid  and  eliminated  by  foreclosure  as  indicated : 

To  be  Refunded: 

First  Mortgage  5%  Gold  Bonds $50,000,000.00 

Coupons  appertaining  to  the  same  in   default    (as    of  March   1, 

1916) 3,750,000.00 

Paid  or  to  be  paid  in  cash  as  audited  by  the  Receivers: 

Unsecured  obligations  of  Old  Company  as  heretofore  ascertained  by 
the  Receivers  (other  than  obligations  owing  to  the  Denver  Com- 
pany), to  be  paid  by  the  Receivers  pursuant  to  order  of  court, 
about   (net)   163,625.54 

Equipment  obligations  of  Receivers  of    Old    Company    (authorized 

but  not  yet  issued) - 600,000.00 

To  be  eliminated  by  Foreclosure: 

Second  Mortgage  5%  Bonds  (owned  by  Denver  Company  and  pledged 

under  its  Refunding  and  Adjustment  Mortgages)  25,000,000.00 

Claims  for  interest  on  Second  Mortgage  Bonds  in  default  (owned  by 
Denver  Company  and  pledged  under  its  Adjustment  Mortgage) 
and  unsecured  debt  (owned  by  Denver  Company — and  in  small 
part  by  its  subsidiary,  the  Utah  Fuel  Company — and  in  part 
pledged  under  the  Denver  Company's  Adjustment  Mortgage),  as 
of  date  of  appointment  of  Receivers,  about 26,800,000.00 

Capital  stock   (5/6  owned  by  Denver  Company  and  pledged  under 

its  Refunding  and  Adjustment  Mortgages)   75,000,000.00 

In  addition  to  the  foregoing  there  are  certain  unliquidated  tort  claims  against  the 
Old  Company  of  relatively  small  amounts  which  are  the  subject  of  pending  actions. 
There  may  also  be  claims  as  yet  unknown.  Probably  none  of  the  claims  remaining  in 
existence  (other  than  the  $163,625.54  of  claims  above  provided  for)  is  entitled  to  pref- 
erence in  the  receivership  proceedings.  It  is  expected  that  all  remaining  claims  will  be 
eliminated  by  foreclosure.  These  claims  are  in  substance  those  owned  by  the  Denver 
Company  as  stated  above.  The  Reorganization  Committee  will  have  power,  to  be  exer- 
cised, if  at  all,  in  its  absolute  discretion  to  consent  to  or  arrange  for  the  payment,  settle- 
ment or  purchase  of  any  such  claims,  other  than  claims  belonging  to  the  Denver  Com- 
pany or  its  subsidiaries. 


6 

V. 
CASH  REQUIREMENTS. 

The  estimated  cash  requirements  of  the  Plan  are  the  following : 

Total  amount  estimated  to  be  required $18,600,000 

It  is  expected  that  this  amount  will  be  applied  as  follows : 
(a)  To  the  purposes  indicated  below  in  this  clause  (a),  in  the  amounts  so 
estimated  or  in  different  proportions  as  the  Reorganization  Commit- 
tee, prior  to  the  completion  of  the  reorganization,  or  the  Board  of  Di- 
rectors of  the  Holding  Company,  thereafter,  may  determine  or 
approve;  the  unexpended  balance  if  any  to  be  employed  as  specified 
below  in  clause  (b) 8,093,750 

To  the  distributive  shares  of  non-assenting  bondholders,  under- 
writing commission,  expenses  of  foreclosure  and  reorganiza- 
tion, including  court  costs,  compensation  and  allowances  of 
the  Receivers  and  their  counsel,  the  Mortgage  Trustee  and 
its  counsel,  taxes  on  creation  and  issuance  of  new  securities, 
compensation  and  expenses  of  the  Protective  and  Reorgan- 
ization committees,  their  depositaries  and  counsel,  fees  of 
engineering,  accounting  and  other  experts,  engraving,  print- 
ing and  miscellaneous  requirements $2,000,000 

To  betterments  of  existing  road ill 2,579,750 

To  acquisition  of  new  passenger  and  freight  equipment  for  Op- 
erating Company _ _.. _..._ 3,514,000 

$8,093,750 

(b)  To  the  acquisition  by  purchase,  construction  or  otherwise  of  extensions  and 
feeders,  including  payment  of  interest  during  construction ;  the  acquisi- 
tion of  additional  new  property  other  than  extensions,  including  floating 
equipment;  payment  of  the  Receivers'  car  trust  obligations;  provision 
of  working  capital  for  the  Operating  Company;  and  supplying  for  any 
of  the  purposes  mentioned  in  clause  (a)  any  amount  required  therefor 
in  excess  of  the  amount  there  specified;  (moneys  to  be  applied  in  such 
amounts  severally  as  the  Reorganization  Committee,  prior  to  the  com- 
pletion of  the  reorganization,  or  the  Board  of  Directors  of  the  Holding 
Company,  thereafter,  may  determine  or  approve) ;  and,  if  the  Board  of 
Directors  of  the  Holding  Company  and  the  Board  of  Directors  of  the 
Operating  Company — or  the  Reorganization  Committee  prior  to  the 
completion  of  the  reorganization — shall  so  determine,  (in  every  case  by 
vote  of  three-fourths  of  all  members  and  subject  to  the  approval  and 
upon  such  conditions,  if  any,  as  may  be  imposed  by  the  Railroad  Com- 
mission of  the  State  of  California),  to  the  protection  of  the  claims 
against  the  Denver  Company  to  be  acquired  as  contemplated  by  the 
Plan  and  of  the  Operating  Company's  situation  with  respect  to  its 
traffic  relations  _ $10,506,250 


Total $18,600,000 


• 


*  See  Note,  p.  7. 


VI. 

PROVISION    FOR    CASH   REQUIREMENTS. 

Provision  for  meeting  the  cash  requirements  of  the  Plan  has  been  made  as  follows : 
It  is  estimated  that  on  March  1,  1916,  the  Eeceivers  should  have  on 
hand  available  for  use  by  the  Operating  Company,  in  cash  or  its  equivalent 

for  the  purposes  of  the  Plan,  not  less  than $600,000 

New  Bonds  of  the  Operating  Company  are  to  be  sold  either  to  Depositors 
or  to  an  Underwriting  Syndicate  which  has  been  formed  and  has  underwritten 
the  sale  of  $20,000,000  of  New  Bonds  together  with  certain  stock  of  the 
Holding  Company,  as  set  forth  in  Article  IX  of  this  Plan,  realizing 18,000,000 


* 


Total  to  be  provided ...... . '.. $18,600,000 

♦The  above  statements  of  Cash  Requirements  and  of  the  Provision  made  therefor  are  merely  estimates  and 
not  to  be  deemed  to  limit  the  amount  that  may  be  raised  or  expended  to  effect  the  reorganization.  The  Reorgan- 
ization Committee  shall  have  power  to  accomplish  the  purposes  proposed,  if  necessary,  by  somewhat  increasing  or 
diminishing  the  amount  of  bonds  to  be  sold  (but  without  varying  the  consideration  or  terms  of  sale)  or  by  dis- 
posing of  stock  of  the  Holding  Company  freed  for  use  by  reason  of  the  failure  of  holders  of  Old  Bonds  to  become 
Depositors  (see  page  9). 


8 

VII. 

SECURITIES  TO  BE  ISSUED  BY  THE  NEW  COMPANIES. 

Securities  are  to  be  issued  by  the  Operating  Company  and  the  Holding  Company, 
respectively,  as  follows: 

By  the  Operating  Company: 

(Subject  to  the  approval  of  the  Railroad  Commission  of  the  State 
of  California  and  any  other  public  officials  having  jurisdiction.) 

First  Mortgage  Gold  Bonds  (the  New  Bonds),  authorized  issue,  $50,000,000 
To  be  secured  by  first  mortgage  upon  all  of  the  existing  railway 
properties  of  the  Old  Company  and  all  property  hereafter  acquired 
by  the  Operating  Company  integrally  connected  therewith  and  all 
property  acquired  by  means  of  the  use  of  proceeds  of  the  New 
Bonds  or  against  which  New  Bonds  shall  be  issued. 

To  be  sold  forthwith  to  the  Depositors  or  to  members  of  the  Underwriting 

Syndicate,  of  said  authorised  issue,  bonds  of  the  principal  amount  of. 20,000,000 

To  be  dated  March  1,  1916  (or  otherwise  as  the  Reorganization 
Committee  may  determine) ;  to  bear  interest  at  the  rate  of  5%  per  an- 
num, payable  March  1  and  September  1;  to  mature  March  1,  1946, 
and  to  be  redeemable,  in  whole  or  in  part,  at  principal  amount  and 
accrued  interest,  after  published  notice,  upon  any  interest  payment 
date. 

To  be  issued  thereafter _ 30,000,000 

for  or  against  betterments,  additions  and  extensions,  under  safe- 
guards to  be  prescribed  in  the  New  Mortgage,  at  not  exceeding  the 
rate  of  $1,000,  principal  amount  of  bonds,  for  $1,000  of  money  actu- 
ally invested  in  additional  physical  property  subject  to  the  New  Mort- 
gage or  in  securities  subject  to  the  New  Mortgage  representing  the 
entire  interest  in  physical  property ;  to  bear  interest  at  a  rate  or  rates 
not  in  any  instance  exceeding  6% ;  by  their  terms  to  be  redeem- 
able;— rates  of  interest,  dates  of  maturity  and  redemption  prices  to 
be  fixed  by  the  Board  of  Directors  of  the  Operating  Company  with 
the  approval  of  the  Board  of  Directors  of  the  Holding  Company, 
from  time  to  time  as  bonds  shall  be  issued. 

Capital  Stock  (to  be  issued  forthwith): 

Preferred,  6%  non-cumulative ;  preferred  both  as  to  dividends 
and  in  liquidation ;  to  be  redeemable  at  105  and  accrued  divi- 
dends, if  any,  for  the  then  current  year  and  to  be  convertible 
into  Common  Stock  at  any  time  prior  to  any  date  fixed 

for  redemption  at  the  rate  of  dollar  for  dollar „.  27,500,000 

Common 47,500,000 

In  its  discretion  and  with  the  approval  of  the  Railroad  Commission 
of  the  State  of  California,  the  Reorganization  Committee  may  cause  the 


9 

Operating  Company  to  issue  its  obligations  bearing  interest  at  tbe  rate 
of  at  least  six  per  cent,  per  annum  in  place  of  tbe  Preferred  Stock  of  the 
Operating  Company  provided  for  in  tbe  Plan  and,  in  its  discretion  and 
with  the  approval  of  said  Commission,  may  cause  obligations,  junior  to 
said  obligations  last  mentioned,  to  be  issued  in  place  of  such  part  as  it 
may  specify  of  the  Common  Stock  of  the  Operating  Company  provided 
for  in  the  Plan,  and  either  of  said  issues  or  any  part  of  either  thereof 
may  be  fixed  obligations  or  income  obligations  and  may  or  may  not  have 
fixed  dates  of  maturity  and  said  obligations  may  be  of  such  character 
otherwise  as  the  Reorganization  Committee  may  determine  consis- 
tently herewith. 

All  of  the  shares  of  such  stock,  preferred  and  common,  or  such  sub- 
stituted obligations,  will  upon  completion  of  the  reorganization  pass  into 
the  ownership  of  and  be  held  by  the  Holding  Company. 

By  the  Holding  Company: 

Capital  Stock  (to  be  issued  forthwith) : 

Preferred,  6%  non-cumulative;  preferred  both  as  to  dividends  and  in 
liquidation;  to  be  redeemable  at  105  and  accrued  dividends,  if  any, 
for  the  then  current  year  and  to  be  convertible  into  Common  Stock 
at  any  time  prior  to  any  date  fixed  for  redemption  at  the  rate  of 
dollar  for  dollar 27,500,000 

Common _ 47,500,000 

VIII. 

SECURITIES  TO  BE  OUTSTANDING  IN  HANDS  OF  THE  PUBLIC. 

It  is  expected  that  after  the  completion  of  the  Reorganization,  securities  will  be  out- 
standing in  the  hands  of  Depositors  and  purchasers  of  New  Bonds  as  follows : 

First  Mortgage  bonds  of  the  Operating  Company  (the  New  Bonds) $20,000,000 

Preferred  Stock  of  the  Holding  Company _._ 27,500,000 

Common  Stock  of  the  Holding  Company „ 47,500,000 

except  that  Preferred  Stock  to  the  extent  of  $500  for  every  $1,000  of  such  Old  Bonds 
as  shall  not  become  subject  to  the  Plan  and  Agreement  and  Common  Stock  to  the  ex- 
tent of  $750  for  every  $1,000  of  such  Old  Bonds,  unless  otherwise  employed  by  the  Reor- 
ganization Committee  for  the  purposes  of  the  reorganization,  will  be  returned  to  the 
Treasury  of  the  Holding  Company. 


10 

IX. 

DISPOSITION  OF  NEW  SECURITIES. 

(A)  Exchange  of  Old  Bonds  for  Stock  of  the  Holding  Company  and  Purchase  of  New 

Bonds  by  Depositors. 

Depositors,  including  transferees  of  certificates  of  deposit,  will  be  entitled  to  receive 
in  exchange  for  their  Old  Bonds  and  their  claims  against  the  Denver  Company 
(all  whereof  by  virtue  of  becoming  subject  to  tbe  Plan  and  Agreement  will  pass 
to  the  Eeorganization  Committee  to  be  used  for  the  purposes  of  the  reorganization 
as  authorized  by  the  Plan  and  Agreement),  stock  (preferred  and  common)  in  the  Hold- 
ing Company,  either  in  connection  with  or  without  the  purchase  by  them  of  First  Mort- 
gage Bonds  of  the  Operating  Company  upon  the  following  basis : 

A  Depositor  will  be  entitled  to  purchase  at  90  and  accrued  interest  New  Bonds  equal 
in  principal  amount  to  40  per  cent,  of  the  principal  amount  of  his  Deposited  Bonds  and 
if  any  Depositor  shall  so  purchase  New  Bonds  he  will  be  entitled  to  receive,  in  addition 
to  the  New  Bonds  so  purchased  and  in  exchange  for  his  Deposited  Bonds,  Preferred 
Stock  of  the  Holding  Company  to  an  amount,  par  value,  equal  to  55%  of  the  principal 
amount  of  his  Deposited  Bonds  and  Common  Stock  thereof  to  an  amount,  par  value, 
equal  to  95%  of  the  principal  amount  of  such  Deposited  Bonds. 

If  a  Depositor  shall  not  exercise  his  said  privilege  to  purchase  New  Bonds  he  will 
be  entitled  to  receive,  in  exchange  for  his  Deposited  Bonds,  Preferred  Stock  of  the  Hold- 
ing Company  of  an  amount,  par  value,  equal  to  50%  of  the  principal  amount  of  his  De- 
posited Bonds  and  Common  Stock  thereof  to  an  amount,  par  value,  equal  to  75%  of  the 
principal  amount  of  such  Deposited  Bonds. 


11 


TABLE  EXHIBITING  PRIVILEGES  AVAILABLE  TO  DEPOSITORS. 


Assumes  as  Basis  a  Deposit  of  $1,000  Principal  Amount  of  Old  Bonds. 


In 

Event 
of 


■o 
c 
o 

m 


3 

Oh 


.  r 

c  his 

o  =  c 

CQ    CK  O 

■"CO 
•a  s" 

3!  8 

bo  o  o 
CO., 


Consideration 

to  be  given 
by  Depositor 


.    -'13 


(a)  Cash  $360,  and  ac- 
crued interest  upon 
$400  of  New  Bonds 


(b)  $1,000  principal 
amount  of  Old  Bonds 
and  coupon  of  March 
1,  1915,  and  subse- 
quent coupons  


(c)  Transfer  of  claims 
against  Denver  Com- 
pany   


oO 


w 


36 


Securities  to  be  Received 


New  Bonds 
Principal 
Amount 


$400 


•o 

>H  ^S 

oO 
■"-■"£  m 


40 


Preferred 

Stock  of 

Holding  Company, 

Par  Value 


13 

oO 

c  ©is 

?■!?! 

fc;2 


$550 


55 


Common 

Stock  of 

Holding  Company 

Par  Value 


$950 


oO 
Oli  o 


95 


I 


(a)  $1,000  principa  I 
amount  of  Old  Bonds 
and  coupon  of  March 
1,  1915,  and  subse- 
quent coupons  

(b)  Transfer  of  claims 
against  Denver  Com- 
pany   


a, 

CD 


CQ 

a 
o 


None 


$500 


50 


$750 


75 


Any  Depositor  desiring  to  avail  himself  of  the  privilege  of  purchasing  New  Bonds 
must  signify  his  election  so  to  do  by  executing  and  delivering  to  the  Reorganization 
Committee  or  its  nominees  a  contract  of  purchase  in  form  prescribed  by  the  Committee, 
on  or  prior  to  the  15th  day  of  February,  1916,  unless  the  time  therefor  shall  be  extended 
by  the  Reorganization  Committee.  In  the  event  that  a  later  date  be  fixed,  Depositors 
will  be  notified  as  promptly  as  practicable,  as  provided  in  the  annexed  Agreement,  of 
the  action  of  the  Reorganization  Committee. 

The  cash  payable  on  account  of  the  purchase  price  of  bonds  so  purchased  is  to  be 
paid  in  instalments  as  follows: 

An  amount  not  exceeding  50%  of  such  cash  purchase  price,  after  February  15,  1916, 
and  prior  to  the  completion  of  the  reorganization,  upon  call  by  the  Reorgan- 
ization Committee. 


12 

The  uncalled  balance  of  such  50%  (i.  e.,  such  part  of  such  first  50%  as  shall  not  have 
been  called  by  the  Beorganization  Committee)   to  the  Operating  Company,  at 
any  time  upon  call  by  its  Board  of  Directors. 
An  amount  not  exceeding  an  additional  25%  to  the  Operating  Company,  at  any  time 

after  January  1st,  1917,  upon  call  by  its  Board  of  Directors. 
The  entire  balance  of  the  cash  purchase  price  to  the  Operating  Company,  at  any 

time  after  June  1st,  1917,  upon  call  by  its  Board  of  Directors. 
In  final  adjustment  of  the  purchase-price,  accrued  interest  upon  bonds  purchased  will 
be  charged  and  interest  will  be  allowed  upon  instalments  previously  paid  at  the  coupon- 
rate. 

Any  Depositor,  upon  any  instalment-payment-date  may  anticipate  payment  of  all,  but 
not  part,  of  the  instalments  of  the  purchase  price  of  the  New  Bonds  purchased  by  him 
then  remaining  unpaid. 

Upon  payment  by  any  Depositor  of  the  first  instalment  payable  upon  his  contract 
to  purchase  New  Bonds  and  the  surrender  of  his  certificate  of  deposit,  duly  endorsed, 
he  will  be  entitled  to  receive  a  new  certificate  evidencing  such  payment  and  also  his  rights 
with  respect  to  the  New  Bonds  and  the  stock  which  he  is  to  receive  hereunder.  Payment 
of  further  instalments  will  be  receipted  for  by  endorsement  upon  such  certificate  upon 
presentation  thereof  for  the  purpose.  The  bonds  and  certificates  for  stock  to  which  a 
Depositor  may  be  entitled  will  be  delivered  only  upon  payment  in  full  of  the  amount  pay- 
able upon  his  contract  of  purchase. 

Every  Depositor  who  shall  elect,  as  herein  provided,  to  purchase  New  Bonds  and  at 
the  date  fixed  for  the  payment  of  the  first  instalment  of  the  purchase  price,  shall  pay 
the  entire  purchase  price  of  the  Bonds  to  be  taken  by  him,  will  be  entitled  to  borrow 
from  the  Underwriting  Syndicate  or  lenders  to  be  provided  by  said  Syndicate  (through 
the  agency  of  the  Depositary,  The  Equitable  Trust  Company  of  New  York,  37  Wall 
Street,  New  York  City)  any  amount  not  exceeding  90  per  cent,  of  the  purchase  price  of 
the  New  Bonds  to  be  taken  by  him  (exclusive  of  accrued  interest  upon  Bonds  purchased) ; 
such  loan  to  be  repaid,  with  interest  at  the  rate  of  six  per  cent,  per  annum,  on  or  before 
one  year  from  the  date  so  fixed  for  the  payment  of  such  first  instalment  of  the  purchase 
price  and  to  be  secured  by  all  of  the  Bonds  and  Certificates  of  Stock  to  which  the  De- 
positor shall  be  entitled  hereunder  upon  the  making  of  such  payment  in  full — the  Under- 
writing Syndicate  or  its  representatives  to  possess  upon  default  such  power  of  sale,  for 
account  of  the  borrower,  as  is  customary  in  cases  of  collateral  loans  by  banks  in  New 
York  City. 

Any  Depositor  who  shall  elect  to  purchase  New  Bonds  as  provided  herein  and  shall 
default  in  making  any  payment  as  required  by  the  Plan  and  Agreement  will,  unless 
the  Beorganization  Committee  shall  otherwise  determine,  forfeit  any  and  all  payments 
that  he  may  have  already  made  and  all  right  to  which  he  would  otherwise  have  been 
entitled  to  acquire  securities,  receive  benefits  or  enforce  rights  hereunder;  and  in  such 
event  the  Beorganization  Committee  in  its  discretion  may  cause  all  of  the  bonds,  claims, 
shares  of  stock  and  benefits  to  which  such  Depositor  otherwise  would  have  been  entitled 
hereunder  to  be  sold  for  his  account  to  satisfy  the  amount  remaining  due  from  such  de- 


13 

faulting  Depositor  and  all  amounts  chargeable  hereunder  against  the  securities,  rights 
and  benefits  so  sold.  But  the  Eeorganization  Committee  may,  in  general  or  in  particular 
instances,  enlarge  or  extend  the  time  for  making  any  of  the  payments  required  by  the 
Plan  and  impose  conditions  in  respect  of  any  payments  the  time  wherefor  shall  be  so 
extended. 

Unpaid  coupons  (appertaining  to  Old  Bonds)  which  became  due  September  1,  1914, 
and  theretofore  will  be  paid  in  cash  by  the  Trustee  under  the  Mortgage  securing  the 
Old  Bonds,  The  Equitable  Trust  Company  of  New  York. 

(B)  Sale  of  New  Bonds  and  Stock  to  Underwriting  Syndicate. 

Such  of  the  New  Bonds  as  shall  not  be  purchased  by  Depositors  are  to  be  taken  by  an 
Underwriting  Syndicate  which  has  been  formed  for  the  purpose  and  has  underwritten 
the  sale,  at  90  and  accrued  interest,  of  all  of  the  $20,000,000  principal  amount  of  New 
Bonds  to  be  issued  forthwith,  and  is  to  receive  $1,000  principal  amount  of  New  Bonds, 
$125  par  value  of  Preferred  Stock  and  $500  par  value  of  Common  Stock  of  the  Hold- 
ing Company  for  each  $900  of  cash  (and  accrued  interest  upon  $1,000  principal  amount 
of  New  Bonds)  paid  by  it.  The  securities  received  by  an  Underwriter  in  consideration 
of  any  given  payment  are  to  be  the  same  in  character  and  amount  as  those  that  will 
be  forfeited  by  Depositors  who  fail  to  exercise  their  privilege  of  purchasing  New  Bonds 
by  payment  of  an  equal  amount. 


14 


TABLE  EXHIBITING  CONSIDERATION  TO  BE  PAID  BY  UNDERWRITERS  AND 
SECURITIES  TO  BE  RECEIVED  THEREFOR. 

Assuming  Purchase  of  $400,  Principal  Amount,  of  New  Bonds. 


Securities  to  be  Received. 

Cash  to  be  paid. 

New  Bonds,  prin- 
cipal amount. 

Preferred  Stock  in 

Holding  Company, 

par  value. 

Common 
Stock    in 

Holding 
Company, 
par  value. 

$360    and    accrued    interest 

upon    $400,    principal 

amount,  of  New  Bonds 

$400 

$50 

$200 

Assuming  Purchase  of  $1,000,  Principal  Amount,  of  New  Bonds. 


$900  and  accrued  interest 
upon  $1,000,  principal 
amount,  of  New  Bonds.... 


$1,000 


$125 


$500 


The  Underwriting  Syndicate,  if  the  Plan  shall  be  declared  operative,  is  to  be  paid 
for  its  agreement  to  underwrite  the  sale  of  the  entire  $20,000,000,  principal  amount,  of 
New  Bonds  and  to  loan  monies  to  Depositors  as  above  provided,  a  cash  commission  of 
two  per  cent,  thereof  (i.  e.,  $400,000).  The  Equitable  Trust  Company  of  New  York  and 
Messrs.  Blair  &  Co.,  "William  Salomon  &  Co.,  and  E.  H.  Rollins  &  Sons,  at  the  request  of 
the  Protective  Committee  having  undertaken,  by  firm  commitment,  to  form  the  syndicate 
above  referred  to  (the  subscribers  and  the  amounts  of  their  subscriptions  severally  to  be 
satisfactory  to  the  Protective  Committee)  and  having  discharged  such  engagement,  are 
to  be  paid  therefor,  if  the  Plan  shall  be  declared  operative,  a  compensation  of  one-half 
of  one  per  cent,  of  the  principal  amount  of  bonds  the  sale  whereof  has  been  under- 
written (i.  e.,  $100,000). 

The  amounts  payable  by  the  Underwriting  Syndicate  will  be  subject  to  call  upon  ten 
days'  notice  at  any  time  after  February  15, 1916,  by  the  Reorganization  Committee  and 
such  amounts  as  are  not  so  called  prior  to  completion  of  the  reorganization  will  be  sub- 
ject to  call  upon  like  notice  by  the  Board  of  Directors  of  the  Operating  Company. 

Upon  delivery  of  bonds  to  the  Underwriting  Syndicate,  accrued  interest  upon  the 
bonds  so  delivered  will  be  charged  and  interest  will  be  allowed  at  the  coupon-rate  upon 
payments,  if  any,  previously  made  upon  account  of  the  purchase  price. 

The  Underwriting  Syndicate  may,  on  the  date  fixed  for  the  making  of  the  first  pay- 
ment to  be  made  by  it,  or  at  any  time  thereafter,  anticipate  payment  of  all  or  any  part 
of  the  purchase  price  of  the  securities  to  be  taken  by  it. 


15 


COMPARATIVE  TABLE  OF  CAPITALIZATION  AND  FIXED  CHARGES  OF  OLD 
COMPANY  AND  OF  THE  COMBINED  NEW  COMPANIES  AT  COMPLETION 
OF  REORGANIZATION. 

The  following  table  exhibits  the  indebtedness,  stock  and  interest  charges  of  the  Old 
Company  on  the  one  hand  and  of  the  Operating  Company  and  Holding  Company  (con- 
solidated) on  the  other: 


Obligations  and  Stock 
Outstanding. 


Old  Company. 


New  Company. 


First  Mortgage  Bonds 

Second  Mortgage  Bonds 

Unsecured  debt  (including  notes, 
open  accounts,  traffic  and  car 
service  balances  and  claims  for 
interest  in  default,  owing  to  the 
Denver  Company  as  of  date  of 
appointment  of  Receivers), 
about   _ 

Miscellaneous  claims  as  ascer- 
tained by  Receivers  (not  in- 
cluding claims  of  considerable 
amount  paid  just  prior  to  Re- 
ceivership)    

Capital  Stock  


Interest  Charges: 
First  Mortgage  Bond  Interest- 
Other  interest   (as  of  date  of 
appointment    of   Receivers), 
about  


$50,000,000 
25,000,000 


26,800,000 


163,625.54 
75,000,000 


2,500,000 


$2,200,000ff 
(accruing,  but  in  prin- 
cipal part  never  paid.) 


*$20,000,000 
None 


None 


None 
75,000,000f 

Preferred, 
27,500,000f 

Common, 
47,500,000t 

$1,000,000 


None 


*  The  Operating  Company,  when  the  proceeds  of  the  New  Bonds  have  been  expended  should  possess  physical 
property,  securities  and  cash  resources  approximately  of  the  value  of  $17,500,000,  in  addition  to  the  property  possessed 
by  the  Old  Company  prior  to  the  Receivership,  which  should  add  materially  to  its  earning  capacity  as  compared 
with  that  of  the  Old  Company. 

t  These  amounts  may  be  somewhat  diminished  as  explained  on  p.  9. 

tt  Does  not  include  interest  on  several  million  dollars  of  indebtedness  to  the  Denver  Company  and  Utah  Fuel 
Company  upon  which  payment  of  interest  was  not  regularly  accrued  upon  the  Western  Pacific  books  prior  to  the 
Receivership. 


16 

XI. 

CLAIMS  AGAINST  THE  DENVER  COMPANY  TO  BE  TRANSFERRED  TO  THE 

HOLDING  COMPANY. 

The  Articles  of  Incorporation  of  the  Holding  Company  shall  provide  that  the  Board 
of  Directors  of  the  Holding  Company  shall  have  power  to  enforce  against  the  Denver  Com- 
pany the  claims  against  the  latter  Company  to  be  acquired  by  the  Holding  Company  as 
herein  provided  or  to  compromise  such  claims  or  to  enter  into  any  arrangement  in  sat- 
isfaction thereof,  but  only  upon  the  condition  that  their  action  shall  be  authorized  or 
ratified  by  the  vote  of  the  holders  of  two-thirds  of  such  shares  of  the  capital  stock 
of  the  Holding  Company  (preferred  and  common  stock  voting  together)  as  shall  be  rep- 
resented in  person  or  by  proxy  at  a  special  meeting  of  the  stockholders  to  be  called 
upon  not  less  than  thirty  days'  notice  for  the  purpose  of  considering  such  settlement, 
compromise  or  other  adjustment,  which  vote  shall  represent  not  less  than  a  majority  in 
amount  of  the  outstanding  capital  stock  of  the  Holding  Company. 

It  shall  be  provided  by  some  effectual  means  that  the  net  proceeds  realized  by  the 
Holding  Company  from  the  enforcement  or  compromise  of  claims  against  the  Denver  Com- 
pany and  all  avails  thereof  in  the  form  of  securities  or  property  shall  be  paid  over  or 
transferred  to  the  Operating  Company,  and  the  Holding  Company,  in  the  discretion  of  its 
Board  of  Directors,  may  transfer  said  claims  to  the  Operating  Company,  which  may  if  it 
shall  so  determine,  cause  the  same  to  be  subjected  to  the  New  Mortgage;  provided  that  if 
such  transfer  be  made  no  settlement,  compromise  or  other  adjustment  of  said  claims 
shall  be  effective  without  the  assent  of  the  stockholders  of  the  Holding  Company  as  above 
required,  or  if  the  Holding  Company  be  dissolved,  then  a  like  assent  of  the  stockholders 
of  the  Operating  Company;  and  provided  further  that  if  any  expense  or  liability  shall 
have  been  incurred  by  the  Holding  Company  in  realizing  upon  or  protecting  such  claims, 
the  payment  or  transfer  shall  be  made  only  after  such  expense  has  been  reimbursed 
and  such  liability  discharged  out  of  such  proceeds  or  avails  or  discharged  or  assumed 
by  the  Operating  Company. 

XII. 

RESTRICTIONS  UPON  THE  SALE  OR  PLEDGE  OF  PROPERTY  AND  THE  CREA- 
TION OF  INDEBTEDNESS. 

The  Articles  of  Incorporation  of  the  Holding  Company  shall  provide  that  the  Hold- 
ing Company  shall  not  (a)  sell,  pledge,  or  in  any  manner  dispose  of  any  part  of  the  stock 
of  the  Operating  Company,  or  (b)  create  any  indebtedness  of  the  Holding  Company 
other  than  such  as  the  Board  of  Directors  shall  deem  to  be  essential  to  the  ordinary  con- 
duct of  the  business  of  the  Company,  unless  such  sale,  pledge  or  other  disposition  of 
the  stock  of  the  Operating  Company  or  the  creation  of  such  indebtedness,  as  the  case 
may  be,  shall  be  approved  by  the  affirmative  vote  of  the  holders  of  two-thirds  of  such 
shares  of  the  capital  stock  of  the  Holding  Company  as  shall  be  represented  in  person  or 
by  proxy  at  a  stockholders'  meeting  of  that  Company  called  upon  not  less  than  thirty 
days'  notice  for  the  purpose  of  passing  upon  the  matter  in  question — which  affirmative 


17 

vote  shall  in  no  case  be  less  than  a  majority  in  amount  of  all  of  the  outstanding  capital 
stock  of  the  Holding  Company. 

The  Articles  of  Incorporation  of  the  Holding  Company  shall,  however,  provide  that 
the  Board  of  Directors  may,  pursuant  to  the  affirmative  vote  of  the  holders  of  two-thirds 
of  such  shares  of  the  capital  stock  of  the  Company  as  shall  be  represented  in  person 
or  by  proxy  at  a  stockholders'  meeting  called  upon  not  less  than  thirty  days'  notice,  for 
the  purpose  of  passing  upon  the  question,  (which  affirmative  vote  shall  be  not  less  than  a 
majority  in  amount  of  all  of  the  outstanding  capital  stock  of  the  Holding  Company),  but  not 
otherwise,  pledge  the  assets  of  the  Company,  or  any  thereof,  for  the  purpose  of  raising 
money  in  order  to  protect  the  claims  against  the  Denver  Company  to  be  acquired  by  the 
Holding  Company  as  provided  in  the  Plan  from  loss  or  impairment  of  value  by  reason 
of  the  foreclosure  of  any  of  the  mortgages  upon  the  property  of  the  Denver  Company  or 
otherwise. 

The  Articles  of  Incorporation  of  the  Holding  Company  and  of  the  Operating  Com- 
pany shall  be  so  formulated  as  to  permit  a  sale  of  the  property  and  assets  of  the  Operat- 
ing Company  as  an  entirety  either  for  cash  or  partly  for  cash  and  partly  upon  credit,  or 
in  exchange  for  bonds  or  stock  or  both  of  any  other  corporation  or  corporations,  provided 
(but  not  otherwise)  such  sale  or  disposition  and  the  consideration  to  be  received  there- 
for, shall  be  approved  both  by  the  affirmative  vote  of  holders  of  two-thirds  in  amount  of 
the  outstanding  capital  stock  of  the  Operating  Company  and  by  the  affirmative  vote  of 
holders  of  two-thirds  of  such  shares  of  the  capital  stock  of  the  Holding  Company  as  shall 
be  represented  in  person  or  by  proxy  at  a  stockholders'  meeting  called,  upon  not  less 
than  thirty  days'  notice,  for  the  purpose  of  passing  upon  the  question  (which  affirma- 
tive vote  shall  be  not  less  than  a  majority  in  amount  of  all  of  the  outstanding  capital 
stock  of  the  Holding  Company). 

XIII. 

DISTRIBUTION  OF  THE  ASSETS  OF  THE  HOLDING  COMPANY  IN  CASE   OF 

DISSOLUTION. 

The  Articles  of  Incorporation  of  the  Holding  Company  shall  provide  that  in  the 
event  of  the  dissolution  or  other  liquidation  of  the  Holding  Company,  no  stockholder 
shall  be  entitled  to  have  the  assets  of  the  Company  converted  into  cash,  or  to  share  in  the 
same  generally,  but  that  if  proper  proceedings  shall  be  taken  for  the  purpose  of  dissolv- 
ing or  liquidating  the  Holding  Company  and  if  the  Board  of  Directors  of  the  Company 
shall  determine  that  the  assets  of  the  Company  shall  be  distributed  in  kind  and  such 
decision  shall-  be  approved  by  the  affirmative  vote  of  a  majority  in  amount  of  the  stock- 
holders of  the  Company  at  a  meeting  thereof  duly  called  for  the  purpose  of  considering 
said  matter  or  of  considering  the  dissolution  or  liquidation  of  the  Holding  Company,  the 
preferred  stockholders  of  the  Holding  Company  shall  be  entitled  and  required  to  receive 
amounts  of  Preferred  Stock  (or  obligations  issued  in  lieu  of  Preferred  Stock  as  per- 
mitted hereby)  of  the  Operating  Company  equal  at  par  value  to  their  respective  hold- 
ings of  the  Preferred  Stock  of  the  Holding  Company,  and  the  common  stockholders  of  the 


18 

Holding  Company  shall  be  entitled  and  required  to  receive  pro  rata  Common  Stocl.  of 
the  Operating  Company  and  such  other  securities  and  cash,  if  any,  as  may  properly  be 
apportionable  to  Common  Stock  of  the  Holding  Company. 

The  Articles  of  Incorporation  of  the  Operating  Company  shall  provide  that,  in  the 
event  of  the  dissolution  or  other  liquidation  of  the  Operating  Company,  (subsequently 
to  the  dissolution  or  liquidation  of  the  Holding  Company),  if  the  Board  of  Directors  of 
the  company  shall  provide  by  resolution  approved  by  the  affirmative  vote  of  eighty  per 
cent,  in  amount  of  the  outstanding  Preferred  Stock  and  eighty  per  cent,  in  amount  of 
the  outstanding  Common  Stock  of  the  Operating  Company  that  the  assets  of  the  com- 
pany shall  be  distributed  in  kind  and  for  the  apportionment  of  said  assets,  for  the  pur- 
poses of  such  distribution,  as  between  the  Preferred  Stock  and  the  Common  Stock  of  the 
company,  the  provision  for  the  distribution  and  apportionment  of  assets  made  by  any 
resolution  so  adopted  and  approved  shall  be  effective  and  binding  upon  all  of  the  stock- 
holders of  the  Operating  Company. 

XIV. 

BOARDS  OF  DIRECTORS  OF  THE  HOLDING  COMPANY  AND  OPERATING 

COMPANY. 

The  first  Board  of  Directors  of  the  Holding  Company  shall  be : 

A.  M.  Hunt,  Frederick  H.  Eoker, 

James  D.  Phelan,  Alvin  W.  Krech, 

George  Whittell,  Starr  J.  Murphy, 

David  B.  Forgan,  William  A.  Bead, 

I.  deBruyn,  William  Salomon, 

C.  Ledyard  Blair,  Bichard  B.  Young. 

Their  successors  shall  be  elected  at  the  annual  meeting  of  the  Stockholders  of  the 
Holding  Company  to  occur  during  the  year  1917,  in  accordance  with  the  provisions  regu- 
lating the  holding  of  stockholders'  meetings  to  be  contained  in  the  Articles  of  Association. 

The  first  Board  of  Directors  of  the  Operating  Company  shall  be  named  by  the 
Beorganization  Committee,  but  members  of  said  Board  will  at  all  times  be  subject  to  re- 
moval and  their  successors  will  be  elected  by  the  Holding  Company,  which  will  be  sub- 
stantially the  sole  stockholder  of  the  Operating  Company. 

XV. 

HOLDERS    OF    SECOND   MORTGAGE   BONDS,    UNSECURED    CREDITORS    AND 
STOCKHOLDERS  OF  THE  OLD  COMPANY. 

No  provision  is  made  in  the  Plan  for  the  allotment  of  any  property  or  any  of  the 
securities  or  money  provided  by  the  Plan  to  holders  of  Second  Mortgage  Bonds,  to  un- 
secured creditors,  or  to  stockholders  of  the  Old  Company. 


19 

XVI. 

NON-ASSENTING  HOLDERS  OF  OLD  BONDS. 

Bondholders  who  shall  have  withdrawn  their  bonds  from  the  operation  of  the  Pro- 
tective Agreement  and  the  holders  of  Old  Bonds  who  shall  not  have  deposited  their  bonds 
under  the  Protective  Agreement  or  hereunder  will  not  be  entitled  to  participate  in  the 
Plan  or  the  benefits  thereof  to  any  extent,  and  will  receive  only  their  distributive 
shares  of  any  balance  of  the  proceeds  derived  from  the  sale  of  the  mortgaged  property 
of  the  Old  Company  that  may  remain  after  the  discharge  of  obligations  and  liabilities 
entitled  to  prior  payment  under  the  terms  of  the  foreclosure  decree  and  orders  of  Court. 

XVII. 
TERMS  AND  EFFECT  OF  PARTICIPATION. 

The  Plan  and  Agreement  having  been  prepared  by,  and  adopted  by  the  unanimous 
vote  or  concurrent  action  of  the  members  of,  the  Protective  Committee  and  filed  with  the 
depositary  named  in  the  Protective  Agreement,  the  Plan  and  Agreement,  after  the  Pro- 
tective Committee  shall  have  published  notice  of  its  preparation,  adoption  and  filing  as 
required  by  the  Protective  Agreement,  will  be  binding  upon  all  holders  of  certificates  of 
deposit  issued  pursuant  to  provisions  of  the  Protective  Agreement  by  The  Equitable 
Trust  Company  of  New  York,  depositary  thereunder,  or  any  of  its  agents  who,  within 
the  time  limited  in  the  Protective  Agreement,  do  not  surrender  their  certificates  of  de- 
posit, withdraw  the  amount  of  deposited  bonds  represented  thereby  and  pay  their  pro 
rata  shares  of  the  indebtedness,  compensation,  expenses  and  liabilities  of  the  Protective 
Committee  as  fixed  by  that  Committee,  all  in  compliance  with  the  conditions  and  pro- 
visions of  the  Protective  Agreement.  All  holders  of  certificates  of  deposit  issued  under 
the  Protective  Agreement  who  shall  fail  so  to  surrender  their  certificates  of  deposit,  with- 
draw their  bonds  and  pay  their  pro  rata  share  of  the  indebtedness,  compensation, 
expenses  and  liabilities  of  the  Protective  Committee,  as  provided  in  the  Protective 
Agreement,  shall  be  conclusively  and  finally  deemed  for  all  purposes  to  have  assented 
to  the  Plan  and  Agreement  and  all  the  terms  thereof,  and,  immediately  upon  the  Plan 
and  Agreement's  being  declared  operative  by  the  Reorganization  Committee,  such  holders 
of  certificates  of  deposit  shall  be  irrevocably  bound  and  concluded  thereby. 

Holders  of  Old  Bonds  who  have  not  already  deposited  their  bonds  under  the  Pro- 
tective Agreement  and  who  desire  to  participate  in  the  benefits  of  the  Plan  and  Agree- 
ment must  deposit  their  bonds,  accompanied  by  all  coupons  maturing  on  or  after  March 
1, 1915,  with  The  Equitable  Trust  Company  of  New  York  (or  some  duly  authorized  agent 
thereof),  as  Depositary  of  the  Eeorganization  Committee  on  or  before  February  7th,  1916, 
receiving  therefor  certificates  of  deposit  in  such  form  as  shall  be  prescribed  by  the  Eeor- 
ganization Committee ;  and  the  holders  of  Old  Bonds  so  depositing  the  same  and  all  hold- 
ers of  certificates  of  deposit  issued  to  evidence  deposits  thereof  shall  be  conclusively 
deemed  to  be  subject  to  and  irrevocably  bound  by  the  Plan  and  Agreement. 

Every  holder  of  any  of  the  certificates  of  deposit  issued  under  the  Protective 
Agreement  who,  by  failure  so  to  withdraw  his  bonds  from  the  operation  of  the  Protective 


20 

Agreement  as  permitted  thereby,  and  every  holder  of  Old  Bonds,  who  by  deposit  of  his 
bonds  or  coupons  with  the  Reorganization  Committee  or  otherwise  as  herein  provided, 
shall  become  bound  by  the  Plan  and  Agreement  and  every  successor  in  interest  of  any 
such  certificate  holder  or  bondholder  shall  be  deemed,  if  the  Plan  and  Agreement  shall  be 
declared  operative  by  the  Reorganization  Committee,  irrevocably  to  have  assigned  and 
transferred  to  the  Reorganization  Committee  all  of  the  said  bonds  and  coupons  so  de- 
posited or  left  upon  deposit  and  all  of  the  claims  against  the  Denver  Company  suscep- 
tible of  assignment  or  transfer  (whether  in  law  or  in  equity)  by  such  Depositor  that  shall 
have  arisen  or  exist  or  that  shall  arise  or  exist  in  favor  of  such  certificate-holder  or  bond- 
holder or  any  predecessor  or  successor  in  interest  of  either  thereof;  and  the  Reorgan- 
ization Committee  is  hereby  irrevocably  authorized  by  every  such  certificate-holder  and 
bondholder  and  every  successor  in  interest  of  either  thereof  to  transfer,  whether  directly 
or  through  the  medium  of  mesne  transfers,  all  such  bonds  and  claims  to  any  corporation 
or  corporations  utilized  by  it  for  the  purpose,  or  in  the  course,  of  the  reorganization,  or 
to  transfer  a  part  of  the  same  or  an  interest  therein  to  one  such  corporation  and  another 
part  or  interest  to  another  or  others,  and  thereby  to  vest  every  such  transferee  with  the 
full  legal  title  to  the  bonds  or  claims  or  interest  so  transferred  to  it  and  the  entire  bene- 
ficial interest  therein. 

The  Reorganization  Committee,  if  it  deem  it  desirable  or  convenient  so  to  do,  may 
require  holders  of  certificates  of  deposit  issued  by  the  Protective  Committee  who  shall 
not  withdraw  their  bonds  as  aforesaid  to  present  their  said  certificates  of  deposit  to  the 
Depositary  hereunder  or  some  agent  thereof  in  order  that  there  may  be  noted  thereon 
the  assent  of  the  holders  thereof  to  the  Plan  and  Agreement  and  the  said  holders  of  such 
certificates  of  deposit  may  be  further  required  to  execute  and  deliver  assignments,  either 
to  the  Reorganization  Committee  or  to  its  nominee  or  nominees,  of  all  their  claims  against 
the  Denver  Company,  but  neither  any  such  notation  of  assent  nor  any  such  assignment 
shall  be  necessary  to  give  binding  effect  to  any  of  the  foregoing  provisions  of  this  Article 
or  to  the  Plan  and  Agreement  in  any  particular. 


21 
XVIII. 

FAILURE  TO  DECLARE  PLAN  OPERATIVE— ABANDONMENT  THEREOF. 

If  the  Plan  and  Agreement  either  in  its  original  form,  or  as  it  may  be  modified  pur- 
suant to  the  provisions  of  the  annexed  Agreement,  shall  not  be  declared  operative  prior 
to  March  15,  1916,  or  in  the  event  that  the  Reorganization  Committee  shall  wholly  aban- 
don the  plan  of  reorganization,  the  Old  Bonds  deposited,  or  the  avails  thereof  then  un- 
der the  control  of  the  Beorganization  Committee,  shall  be  delivered  to  the  Depositors  in 
amounts  representing  either  respective  interests,  upon  surrender  of  their  several  certifi- 
cates of  deposit  properly  endorsed  and  payment  of  their  respective  shares  of  the  com- 
pensation, disbursements,  expenses,  and  liabilities  of  the  Beorganization  Committee  and 
of  the  Protective  Committee,  as  fixed  by  the  Beorganization  Committee.  In  such  case 
any  moneys  paid  by  a  Depositor  pursuant  to  any  of  the  provisions  of  the  Plan  or  the 
proceeds  thereof  remaining  after  deducting  therefrom  his  share  of  the  compensation, 
disbursements,  expenses  and  liabilities  of  the  Beorganization  Committee  and  Protective 
Committee  payable  by  said  Depositor  and  not  already  reimbursed,  shall  be  returned,  but 
without  interest,  to  the  Depositor  entitled  thereto. 


XIX. 

STATEMENTS   CONTAINED  IN  PLAN. 

This  Plan  has  been  adopted  by  the  Protective  Committee,  acting  under  the  Protec- 
tive Agreement.  The  statements  contained  in  the  Plan  have  been  compiled  from  sources 
believed  to  be  reliable  and  accurate,  but  certain  of  them  are  necessarily  approximate  and 
none  is  to  be  construed  as  a  representation  or  as  an  inducement  to  any  action  or  to  any 
omission  to  act  upon  the  part  of  anyone.  No  error  or  misstatement  of  any  description 
in  the  Plan  shall  constitute  ground  for  the  withdrawal  of  any  Depositor  from  the  Plan 
and  Agreement  nor  for  any  complaint  with  respect  to  the  same  or  with  respect  to  any 
consequences  arising  from  having  become  a  party  thereto. 


XX. 
AGREEMENT  OF  REORGANIZATION. 

In  order  to  enable  the  Plan  to  be  carried  out  and  to  give  effect  to  the  same  the  annexed 
Agreement  of  Beorganization  has  been  prepared.  Whenever  the  word  "Plan"  is  used 
herein  it  shall  be  deemed  to  include  said  Agreement  and  the  provisions  thereof,  and 
every  depositor  who  shall  assent  to  the  Plan  in  any  manner  thereby  will  become  a  party 
to  the  Agreement,  the  provisions  of  which  shall  govern  in  any  case  of  conflict  between 
the  Plan  and  the  Agreement. 

Dated,  December  15,  1915. 


22 


AGREEMENT. 

AGREEMENT  made  as  of  December  15,  1915,  between 

(a)  A.  M.  Hunt,  James  D.  Phelan,  George  Whittell,  David  R.  Forgan,  I.  de  Bruyn, 
C.  Ledyabd  Blair,  Frederick  H.  Ecker,  Alvin  W.  Krech,  Starr  J.  Murphy,  William 
A.  Read,  William  Salomon  and  Richard  B.  Young,  as  the  Reorganization  Committee 
provided  for  and  named  in  the  foregoing  Plan  of  Reorganization,  parties  of  the  first  part ; 

(b)  Holders  of  Certificates  of  Deposit  issued  under  a  Protective  Agreement,  dated 
May  1,  1915,  which  represent  First  Mortgage  Five  Per  Cent.  Thirty  Year  Gold  Bonds  of 
Western  Pacific  Railway  Company  issued  under  the  First  Mortgage  of  said  Railway 
Company  dated  September  1,  1903,  who  shall  become  parties  hereto  in  the  manner  set 
forth  in  the  Plan  of  Reorganization  to  which  this  Agreement  is  annexed  or  as  prescribed 
herein ; 

(c)  Holders  of  such  First  Mortgage  Five  Per  Cent.  Thirty  Year  Gold  Bonds  who 
shall  become  parties  hereto  in  the  manner  so  set  forth  or  prescribed ; 

Such  holders  of  said  certificates  of  deposit  and  said  bonds  constituting  the  parties  of 
the  second  part;  and 

(d)  Alvin  W.  Krech,  C.  Ledyard  Blair,  I.  de  Bruyn,  Frederick  H.  Ecker,  David 
R.  Forgan,  A.  M.  Hunt,  Starr  J.  Murphy,  James  D.  Phelan,  William  A.  Read,  William 
Salomon,  George  Whittell  and  Richard  B.  Young,  as  the  Committee  acting  under  said 
Western  Pacific  Railway  Company  First  Mortgage  Bondholders'  Protective  Agreement 
dated  May  1,  1915,  parties  of  the  third  part : 

WITNESSETH : 

The  parties  hereto  for  and  in  consideration  of  the  conditions  and  promises  herein- 
after set  forth  and  for  the  purpose  of  mutually  assuring  the  carrying  out  the  foregoing 
Plan  of  Reorganization  (herein  referred  to  as  the  "Plan")  have  mutually  agreed  and 
hereby  do  severally  agree,  each  of  the  Depositors  and  the  Protective  Committee  agree- 
ing with  the  Reorganization  Committee  and  the  Depositors  agreeing  with  one  another, 
but  each  of  them  agreeing  for  himself  and  not  for  any  of  the  others,  as  follows : 

First.— The  terminology  adopted  in  the  Plan,  as  set  forth  in  Article  I  thereof,  is 
adopted  also  for  the  purposes  of  this  Agreement. 

Second. — The  Plan  is  hereby  adopted  and  approved  and  is  to  be  taken  as  a  part  of 
this  Agreement  with  the  same  effect  as  though  it  were  embodied  herein  and  the  Plan  and 
this  Agreement  shall  be  read  as  parts  of  one  and  the  same  instrument,  but  in  case  of  con- 
flict between  the  Plan  and  this  Agreement  the  provisions  of  this  Agreement  shall  control. 
No  statement,  recital,  explanation,  estimate,  opinion,  suggestion  or  anything  else  contained 
in  the  Plan  or  Agreement  or  in  the  Introductory  Statement  prefixed  to  the  Plan  or  in  any 
circular  issued  or  which  may  hereafter  be  issued,  whether  by  advertisement  or  other- 
wise by  or  on  behalf  of  the  Reorganization  Committee,  the  Protective  Committee,  or  by 
any  of  the  members  of  said  Committees  or  by  any  depositary,  sub-depositary  or  agent  of 
a  depositary  under  the  Plan  and  Agreement  or  the  Protective  Agreement  or  by  the 
Western  Pacific  Railway  Company  (the  Old  Company)  or  by  either  or  both  of  the  Receivers 


23 

of  the  Old  Company,  or  by  any  other  corporation,  body  or  person,  is  intended  or  is  to 
be  taken  as  a  representation  or  warranty  or  as  a  condition  of  or  inducement  to  any  de- 
posit under  or  assent  to  the  Plan  and  Agreement  and  no  omission,  defect,  error  or  mis- 
statement therein  shall  constitute  cause  for  any  complaint  or  shall  release  any  deposit 
under  the  Plan  and  Agreement  or  affect  or  release  any  assent  thereto  or  anything  done 
thereunder  or  in  connection  therewith,  except  by  virtue  of  the  written  consent  to  such 
release  of  the  Reorganization  Committee. 

Third. — Participation  in  the  Plan  in  any  respect  whatsoever  is  dependent  upon  the 
holders  of  the  certificates  of  deposit  and  bonds  hereinbefore  mentioned  becoming  parties 
to  the  Plan  and  Agreement  in  manner  as  follows : 

The  Plan  and  Agreement  having  been  prepared  by  and  adopted  by  the  unanimous  vote 
of  the  members  of  the  Protective  Committee  and  filed  with  the  depositary  named  in  the 
Protective  Agreement,  shall,  after  the  Protective  Committee  shall  have  published  notice  of 
its  preparation,  adoption  and  filing  as  required  by  the  Protective  Agreement,  be  binding 
upon  all  holders  of  certificates  of  deposit  issued  pursuant  to  provisions  of  the  Protective 
Agreement  and  all  parties  whose  Old  Bonds  shall  have  become  subject  thereto,  who, 
within  the  time  limited  in  the  Protective  Agreement,  shall  not  surrender  their  certificates 
of  deposit,  withdraw  the  amount  of  deposited  bonds  represented  thereby  and  pay  their 
pro  rata  shares  of  the  indebtedness,  compensation,  expenses  and  liabilities  of  the  Protec- 
tive Committee  as  fixed  by  said  Committee,  complying  in  all  respects  with  the  condi- 
tions and  provisions  of  the  Protective  Agreement  in  that  behalf;  and  all  holders  of  cer- 
tificates of  deposit  issued  under  the  Protective  Agreement  and  all  parties  whose  Old  Bonds 
shall  have  become  subject  thereto,  who  shall  fail  so  to  surrender  their  certificates  of 
deposit,  withdraw  their  bonds  and  pay  their  pro  rata  share  of  the  indebtedness,  com- 
pensation, expenses  and  liabilities  of  the  Protective  Committee  and  all  of  their  succes- 
sors in  interest  shall  be  conclusively  and  finally  deemed  for  all  purposes  to  have  assented 
and  become  parties  to  the  Plan  and  Agreement,  and  immediately  upon  the  Plan  and 
Agreement's  being  declared  operative  by  the  Beorganization  Committee,  such  holders  of 
certificates  of  deposit  and  parties  whose  Old  Bonds  shall  have  become  subject  to  the 
Protective  Agreement  shall  be  irrevocably  bound  and  concluded  thereby. 

Holders  of  Old  Bonds  who  have  not  already  deposited  their  bonds  under  the  Pro- 
tective Agreement  and  who  desire  to  participate  in  the  benefits  of  the  Plan  and  Agree- 
ment shall  deposit  their  bonds,  accompanied  by  all  coupons  maturing  on  or  after  March 
1, 1915,  with  The  Equitable  Trust  Company  of  New  York  (or  some  duly  authorized  agent 
thereof),  as  the  Depositary  under  the  Plan  and  Agreement,  on  or  before  February  7th, 
1916,  receiving  therefor  certificates  of  deposit  in  such  form  as  shall  be  prescribed  by 
the  Reorganization  Committee;  and  the  holders  of  Old  Bonds  so  depositing  the  same 
and  all  holders  of  certificates  of  deposit  issued  to  evidence  such  deposits  shall  be  con- 
clusively deemed  to  be  subject  to  and  irrevocably  bound  by  and  to  have  become  parties 
to  the  Plan  and  Agreement. 

The  Reorganization  Committee  may  in  its  discretion,  permit  the  holders  of  Depos- 
ited Bonds  to  become  parties  to  the  Plan  and  Agreement  without  the  actual  deposit  of 
their  bonds,  and  all  bondholders  so  becoming  parties  shall  be  embraced  within  the  term 
' '  Depositors ' '  whenever  used  in  the  Plan  or  in  this  Agreement.  The  Reorganization  Com- 
mittee may  authorize  the  acceptance  for  deposit  under  the  Plan  and  Agreement  of  Old 
Bonds  without  such  of  the  interest  coupons  appertaining  thereto  as  the  Committee  may 
specify,  and  also  may  authorize  the  acceptance  for  deposit  under  the  Plan  and  Agree- 
ment, upon  such  terms  and  conditions  as  the  Reorganization  Committee  in  its  absolute 


24 

discretion  may  prescribe,  of  interest  coupons  without  the  bonds  to  which  they  apper- 
tain. 

Every  holder  of  any  of  the  certificates  of  deposit  issued  under  the  Protective  Agree- 
ment and  every  party  whose  Old  Bonds  or  coupons  shall  have  become  subject  thereto,  who 
by  failure  to  withdraw  his  bonds  or  coupons  from  the  operation  of  the  Protective  Agree- 
ment as  permitted  thereby,  and  every  holder  of  Old  Bonds  or  coupons,  who  by  deposit  of 
his  bonds  or  coupons  or  otherwise  as  herein  provided,  shall  become  a  party  to  the  Plan 
and  Agreement  and  every  successor  in  interest  of  any  such  Depositor  shall  be  deemed, 
if  the  Plan  and  Agreement  shall  be  declared  operative  by  the  Eeorganization  Commit- 
tee, irrevocably  to  have  assigned  and  transferred  to  the  Reorganization  Committee  all  of 
the  bonds  and  coupons  so  deposited  or  left  upon  deposit  and  all  of  the  claims  against  the 
Denver  Company  susceptible  of  assignment  or  transfer  (whether  in  law  or  in  equity)  by 
such  Depositor  that  shall  have  arisen  or  exist  or  shall  arise  or  exist  in  favor  of  or  be  en- 
forceable by  or  on  behalf  or  for  the  benefit  of  such  Depositor  or  any  predecessor  or  suc- 
cessor in  interest  thereof;  and  in  such  event,  the  Reorganization  Committee  are  hereby 
vested  as  trustees  of  an  express  trust  with  the  legal  title  to  all  of  the  Deposited  Bonds 
and  coupons  and  all  claims  against  the  Denver  Company  deemed  to  be  transferred  as 
aforesaid;  and  the  Reorganization  Committee  is  hereby  irrevocably  authorized  by  every 
such  Depositor  to  utilize  all  or  any  of  such  bonds  and  of  the  coupons  appertaining 
thereto  and  other  deposited  coupons  and  any  part  of  any  amount  payable  upon  any 
thereof  in  satisfying  the  purchase  price  to  be  paid  for  any  of  the  property  of  the  Old 
Company  purchased  by  or  at  the  instance  of  the  Reorganization  Committee  for  the  pur- 
poses of  the  reorganization  and  to  transfer,  whether  directly  or  through  the  medium  of 
any  mesne  transfers,  all  such  bonds  and  coupons  (or  any  interest  therein  or  claims  based 
thereon  remaining  after  the  same  shall  have  been  utilized  in  payment  of  such  purchase 
price)  and  all  such  claims  against  the  Denver  Company  to  any  corporation  or  corpora- 
tions used  by  the  Reorganization  Committee  for  the  purpose  or  in  the  course  of  the  reor- 
ganization provided  for  in  the  Plan,  or  to  transfer  the  same  in  part  to  one  such  corpora- 
tion and  in  part  to  another  or  others,  and  thereby  to  vest  every  such  transferee  with  the 
full  legal  title  to  the  bonds  or  claims  or  interest  in  bonds  or  claims  so  transferred  to  it 
and  the  beneficial  interest  therein. 

Certificates  of  Deposit  issued  under  the  Protective  Agreement  and  representing  Old 
Bonds  which  shall  become  subject  to  the  Plan  and  Agreement  as  herein  provided,  shall 
entitle  the  holders  thereof  to  the  same  rights  and  render  them  subject  to  the  same  obli- 
gations as  if  the  Old  Bonds  represented  thereby  had  been  deposited  under  the  Plan  and 
Agreement  and  certificates  of  deposit  had  been  issued  therefor  hereunder.  The  Reor- 
ganization Committee,  if  it  deem  it  desirable  or  convenient  so  to  do,  may  require  holders 
of  certificates  of  deposit  issued  under  the  Protective  Agreement  who  shall  not  withdraw 
their  bonds  as  aforesaid  to  present  their  said  certificates  of  deposit  to  the  Depositary 
hereunder  in  order  that  there  may  be  noted  thereon  the  assent  of  the  holders  thereof 
to  the  Plan  and  Agreement  and  the  said  holders  of  such  certificates  of  deposit  may  be 
further  required  to  execute  and  deliver  to  said  Depositary  assignments,  either  to  the  Re- 
organization Committee  or  to  its  nominee  or  nominees,  of  all  claims  against  the  Denver 
Company  arising  or  to  arise  as  aforesaid. 

Certificates  of  deposit  issued  for  Deposited  Bonds  under  the  Protective  Agreement 
or  hereunder  and  all  interests  and  rights  represented  thereby,  shall  be  transferable,  but 
only  subject  to  the  terms  and  conditions  of  the  Plan  and  Agreement  and  in  such  man- 
ner as  the  Reorganization  Committee  shall  prescribe  or  approve.  Upon  any  such  trans- 
fer all  rights  of  the  transferor  evidenced  by  such  certificates,  and  as  well  all  amounts 


25 

paid  upon  the  purchase  price  of  New  Bonds  purchased  by  virtue  of  the  interest  in  De- 
posited Bonds  represented  by  such  certificate  of  deposit,  shall  pass  to  the  transferee 
and  the  transferees  and  subsequent  holders  of  any  such  certificate  of  deposit  shall  for  all 
purposes  be  substituted  in  place  of  prior  holders  subject  to  this  Agreement  and  the  acts 
of  the  original  Depositor  shall  be  binding  upon  and  be  deemed  the  acts  of  every  such 
transferee.  By  accepting  or  holding  any  certificate  of  deposit,  every  recipient  or  holder 
thereof  (whether  the  same  be  issued  in  his  name  or  otherwise)  shall  become  thereby 
a  party  to  the  Plan  and  Agreement  with  the  same  force  and  effect  as  though  an  actual 
subscriber  thereof  and  shall  thereby  authorize  the  Reorganization  Committee  to  affix  his 
signature  thereto. 

The  certificates  of  deposit  and  any  interim,  or  other  certificates  or  receipts  issued  by 
or  for  the  Reorganization  Committee  or  the  Protective  Committee  or  any  depositary  of 
either  may  be  treated  by  the  Reorganization  Committee  and  the  Depositary  as  negotiable 
instruments,  and  the  bearer  or,  if  registered,  the  registered  holder  for  the  time  being,  may 
be  deemed  by  the  Reorganization  Committee  and  the  Depositary  to  be  the  absolute  owner 
thereof  and  of  all  of  the  rights  of  the  original  depositor  and  of  every  holder,  and  neither 
the  Reorganization  Committee  nor  the  Depositary  shall  be  affected  by  any  notice  to  the 
contrary. 

All  Depositors  agree  to  execute  from  time  to  time  on  demand  of  the  Reorganization 
Committee  any  and  all  such  powers  of  attorney  as  said  Committee  in  its  discretion  shall 
deem  necessary  or  advisable,  and  also  to  execute  from  time  to  time  on  demand  of  the 
Reorganization  Committee  any  and  all  such  transfers  and  assignments  or  writings  re- 
quired for  vesting  or  evidencing  the  complete  ownership  of  the  Old  Bonds  represented  by 
certificates  of  deposit  and  the  claims  against  the  Denver  Company  as  the  Reorganization 
Committee  may  determine. 

Fourth. — February  7,  1916,  shall  be  the  limit  of  time  within  which  bondholders  shall 
have  the  right  to  deposit  their  Old  Bonds  and  within  which  they  may  become  parties  to 
the  Plan  and  Agreement,  but  the  Reorganization  Committee  in  its  discretion,  either  gen- 
erally or  in  special  instances,  may  extend  such  time  or  renew  the  period  or  periods  fixed 
or  limited  for  such  deposit,  such  extension  of  time  to  be  upon  such  terms  and  conditions, 
if  any,  as  the  Reorganization  Committee  may  see  fit  to  prescribe.  Holders  of  Old  Bonds 
who  do  not  deposit  the  same  or  become  parties  hereto  in  the  manner  herein  provided  with- 
in the  periods  respectively  limited  or  fixed  therefor,  as  aforesaid,  and  holders  of  certifi- 
cates of  deposit  issued  under  the  Protective  Agreement  who  shall  exercise  their  right  of 
withdrawal  as  provided  in  the  Protective  Agreement,  will  not  be  entitled  to  deposit  their 
bonds  or  to  become  parties  to  this  Agreement  or  to  share  in  the  benefits  of  the  Plan  and 
Agreement  and  shall  acquire  no  rights  hereunder,  except  upon  obtaining  the  express  con- 
sent in  writing  to  such  deposit  and  participation  of  the  Reorganization  Committee,  which 
may,  in  its  absolute  discretion,  and  upon  such  terms  and  conditions  as  it  may  see  fit, 
withhold  or  give  such  consent. 

Fifth. — The  Reorganization  Committee  shall  be  the  sole  and  final  judge  as  to  when 
and  whether  sufficient  Old  Bonds  shall  have  become  subject  to  the  Plan  and  Agreement  to 
and  whether  other  conditions  do  warrant  it  in  declaring  the  Plan  operative  and  in  attempt- 
ing to  carry  the  same  into  effect,  and  it  shall  have  power  whenever  it  shall  deem  proper 
(notwithstanding  anything  that  may  have  been  done),  to  abandon  the  Plan  or  any  part 
thereof.  The  Reorganization  Committee  by  the  affirmative  vote  of  three-fourths  of  its 
members  may  modify  the  Plan  in  whole  or  in  part  (and  even  if  such  modification  shall 
amount  to  the  substitution  of  a  new  Plan  therefor)  and  any  such  modification  or  any  modi- 


26 

fied  plan  may  deal  with  and  provide  for  any  or  all  matters  that  under  the  Protective 
Agreement  might  have  been  dealt  with  or  provided  for  in  the  Plan  and  Agreement. 
After  any  modification  by  a  like  vote  the  Eeorganization  Committee  may  restore  to 
the  Plan  any  abandoned  part  or  parts  thereof  or  discard  any  such  modification 
and  the  Committee  thereafter  may  seek  to  carry  the  Plan  into  effect  as  fully  as 
if  such  part  or  parts  had  not  been  abandoned  or  such  modification  made.  It 
may  attempt  to  carry  the  Plan  into  effect  rather  than  abandon  or  modify  the  same, 
even  though  it  be  manifest  that  in  attempting  to  carry  out  the  Plan  it  must  depart  from 
the  original  Plan  or  some  part  thereof.  Any  modification,  when  made  by  the  Eeorganiza- 
tion Committee  as  above  provided,  shall  thereupon  become  and  be  part  of  the  Plan  and 
Agreement,  but  in  case  of  any  intentional  modification  of  the  Plan  a  statement  of  such 
modification  shall  be  filed  with  the  Depositary;  and  in  case  of  any  such  intentional 
modification  which  shall  alter  the  Plan  in  any  substantial  respect,  a  statement  of  sucb 
modification  shall  be  filed  with  the  Depositary  and  notice  of  the  fact  of  such  filing  shall 
be  given  as  hereinafter  provided  in  Article  Fifteenth  and  within  four  weeks  after  the  first 
publication  of  such  notice,  all  Depositors  may  surrender  their  respective  certificates  of 
deposit,  in  negotiable  form,  to  the  Depositary  and  may  withdraw  their  Deposited  Bonds 
or  the  avails  thereof  then  under  the  control  of  the  Eeorganization  Committee,  to  the 
amounts  properly  apportionable  to  such  certificates,  respectively;  provided,  however,  in 
every  case  of  such  withdrawal  the  Depositor  shall  make  payment  of  his  share  of  the  com- 
pensation, disbursements,  expenses  and  liabilities  of  the  Eeorganization  Committee  and 
the  Protective  Committee,  as  fixed  by  the  Eeorganization  Committee.  Every  such  Deposi- 
tor so  withdrawing  shall  thereupon,  without  any  further  act,  be  released  from  the  Plan 
and  Agreement  and  shall  cease  to  have  any  rights  hereunder,  and  the  Deposited  Bonds 
represented  by  the  certificates  of  deposit  so  surrendered,  or  the  avails  thereof  then  under 
the  control  of  the  Eeorganization  Committee,  as  the  case  may  be,  shall  thereupon  be  re- 
leased herefrom,  and  the  exercise  of  such  right  of  withdrawal  shall  release  and  discharge 
the  Eeorganization  Committee  and  the  Depositary  from  all  liability  of  every  character 
to  every  such  withdrawing  Depositor,  except  so  far  as  provision  is  hereinafter  made  in 
regard  to  cases  where  money  has  been  paid  in  under  the  Plan.  Every  Depositor  not  so 
withdrawing  within  such  four  weeks  after  the  first  publication  of  said  notice  shall  be 
deemed  to  have  assented  to  the  proposed  modification  and  whether  or  not  otherwise  ob- 
jecting shall  be  bound  thereby  as  fully  and  effectively  as  if  he  had  actually  assented  there- 
to. Any  modifications  made  as  herein  provided  shall  be  part  of  the  Plan  and  Agree- 
ment, and  all  provisions  hereof  concerning  and  references  herein  to  the  Plan  shall  apply 
to  the  Plan  as  so  changed  and  modified.  If,  nevertheless,  the  Plan  shall  be  modified  and 
in  consequence  thereof  Deposited  Bonds  shall  be  withdrawn  as  permitted  hereby  and 
thereafter  the  Plan  shall  again  be  modified  so  as  to  restore  it  to  the  form  or  so  that  it 
shall  have  substantially  the  effect  of  the  Plan  as  it  existed  immediately  prior  to  such 
first  modification,  the  Eeorganization  Committee  shall  provide  that  all  bonds  that  have 
been  so  withdrawn  may  again  be  deposited  hereunder  within  some  reasonable  period  to 
be  prescribed  by  the  Committee. 

The  Eeorganization  Committee  may  construe  the  Plan  and  Agreement  and  its  con- 
struction thereof  or  action  thereunder  in  good  faith  shall  be  final  and  conclusive.  It 
may  supply  any  defect  or  omission  or  reconcile  any  inconsistency  in  such  manner  and 
to  such  extent  as  shall  be  deemed  by  it  expedient  to  carry  out  the  Plan  properly  and 
effectively,  and  it  shall  be  the  sole  judge  of  such  expediency.  This  agreement  is  in  all 
respects  to  be  liberally  construed  to  enable  the  Eeorganization  Committee  to  carry  into 
effect  the  Plan,  whether  in  the  form  hereto  attached  or  as  changed  or  modified  pursuant 


27 

to  the  provisions  hereof.  The  Eeorganization  Committee  may  at  any  time,  and  from 
time  to  time,  file  with  the  Depositary  a  statement  or  statements  specifying  the  amount  of 
securities  which  any  company  utilized  in  the  reorganization  may  or  shall  issue  for  the 
purpose  of  carrying  out  the  Plan  and  Agreement  or  specifying  in  detail  the  terms  upon 
which  any  holders  of  claims  against  the  Old  Company  not  provided  for  in  the  Plan  may 
become  parties  to  the  Plan  and  Agreement  or  specifying  the  amount  of  cash  or  securi- 
ties which  which  shall  be  deliverable  to  any  person  or  corporation  for  the  purpose  of  car- 
rying out  the  Plan  and  Agreement,  the  amount  of  which  is  not  now  expressly  specified 
therein,  and  any  other  statement  expressing  authority  to  do  anything  which  in  its  opin- 
ion is  expressly  or  impliedly  authorized  by  the  Plan;  and  such  statement  or.  statements 
shall,  when  filed  and  without  further  notice,  be  a  part  of  the  Plan  and  Agreement  as  if 
contained  in  the  original  Plan  or  in  this  Agreement. 

In  case  the  Eeorganization  Committee  shall  not  prior  to  March  15,  1916,  declare  the 
Plan  operative  (either  as  originally  filed  or  as  the  same  shall  be  modified  pursuant  to  the 
provisions  hereof),  or  in  case  the  Eeorganization  Committee  shall  abandon  the  entire  plan 
of  reorganization,  the  Deposited  Bonds  or  the  avails  thereof  then  under  the  control  of 
the  Eeorganization  Committee  shall  be  delivered  to  the  several  Depositors  in  amounts  rep- 
resenting their  respective  interests  hereunder,  upon  surrender  of  their  several  certifi- 
cates of  deposit  in  negotiable  form,  and  payment  of  their  respective  shares  of  the  com- 
pensation, disbursements,  expenses  and  liabilities  of  the  Eeorganization  Committee  and 
of  the  Protective  Committee,  as  fixed  by  the  Eeorganization  Committee. 

The  Eeorganization  Committee  may,  whenever  and  upon  such  terms  as  it  shall 
deem  proper,  accept  from  any  Depositor  the  surrender  of  any  certificate  of  deposit 
and,  upon  receipt  thereof  and  payment  of  such  Depositor's  share  of  the  compensation, 
disbursements,  expenses  and  liabilities  of  the  Eeorganization  Committee  and  of  the  Pro- 
tective Committee,  as  fixed  by  the  Eeorganization  Committee,  it  may  surrender  and  de- 
liver Deposited  Bonds  of  the  amount  in  such  certificate  stated  (or  the  avails  thereof 
then  under  its  control)  which  thereupon  shall  be  deemed  to  be  released  and  discharged 
from  and  no  longer  to  be  entitled  to  any  of  the  benefits  of  the  Plan  and  Agreement. 

In  every  case  of  withdrawal  or  release  from  the  Plan  and  Agreement  of  Old  Bonds  or 
their  avails,  or  of  final  abandonment  of  the  entire  plan,  the  Eeorganization  Committee  shall 
apportion  to  the  Deposited  Bonds  the  shares  of  the  compensation,  disbursements,  expenses 
and  liabilities  of  the  Eeorganization  Committee  and  of  the  Protective  Committee,  in  the 
opinion  of  the  Eeorganization  Committee  fairly  chargeable  thereto,  and  any  such  ap- 
portionment made  by  the  Eeorganization  Committee  shall  be  binding  upon  all  Deposi- 
tors and  shall  be  a  charge  upon  the  Deposited  Bonds  and  the  avails  thereof.  The  word 
"liabilities"  when  used  in  this  Agreement  shall  be  deemed  to  include  any  sums  due  to 
any  Syndicate  or  Syndicates  organized  as  contemplated  by  the  Plan  and  Agreement  in 
repayment  of  sums  theretofore  paid  or  advanced  by  it  or  them  for  the  purposes  of  the 
reorganization,  and  also  all  sums  of  money,  securities  or  other  property  borrowed  or 
owed  or  advanced  by  the  Eeorganization  Committee  and  all  sums  as  security 
for  the  payment  of  which  the  Eeorganization  Committee  shall  have  pledged  or  charged 
securities  or  property  under  its  control  as  authorized  hereby.  In  case  a  Depositor,  as 
a  condition  of  the  withdrawal  of  securities,  shall  be  required  to  contribute  toward 
any  advances  made  or  the  repayment  of  any  amounts  invested  in  property  or 
securities,  he  shall  be  entitled  to  receive  from  the  Eeorganization  Committee  a  certifi- 
cate evidencing  his  interest  in  such  advances  or  investment.  In  any  case  of  such  with- 
drawal, release  or  abandonment  of  the  entire  plan  moneys  paid  by  any  withdrawing 


28 

Depositor  pursuant  to  the  provisions  of  the  Plan  and  Agreement  or  the  proceeds  thereof 
remaining  after  deducting  therefrom  the  share  of  compensation,  disbursements,  expenses 
and  liabilities  incurred  by  the  Eeorganization  Committee  and  of  the  Protective  Commit- 
tee payable  by  such  Depositor  and  not  already  reimbursed,  shall  be  returned,  but  with- 
out interest,  to  the  Depositor  entitled  thereto.  In  every  such  case,  any  moneys  actually 
collected  by  the  Eeorganization  Committee  on  account  of  Deposited  Bonds  or  coupons  or 
claims  against  the  Denver  Company  shall  be  accounted  for  by  the  Eeorganization  Com- 
mittee. The  Eeorganization  Committee  shall  not,  however,  be  held  responsible  for  loss 
of  any  money  disbursed  or  expended  by  it  for  the  purposes  of  the  Plan  and  Agreement 
nor  for  any  depreciation  in  value  of  any  Old  Bonds,  property  or  securities,  and  Deposi- 
tors shall  have  no  claim  for  the  return  of  any  Old  Bonds  or  any  moneys  except  to  the 
extent  of  their  equitable  shares  of  such  bonds  or  moneys  or  the  avails  thereof  at  the  time 
remaining  in  the  hands  of,  or  under  the  control  of,  the  Eeorganization  Committee.  Not- 
withstanding any  provisions  of  this  agreement  to  the  contrary,  the  pecuniary  liability 
of  the  Depositors  shall  in  every  case  (except  with  respect  to  payment  for  New  Bonds 
purchased  by  them)  be  confined  to  a  charge  upon  the  Deposited  Bonds  or  their  avails 
and  the  claims  and  other  property  and  securities,  if  any,  under  the  control  of  the  Eeor- 
ganization Committee  and  no  liability  in  excess  thereof  shall  be  assessed  against  the 
Depositors,  but  the  Eeorganization  Committee,  its  successors  and  assigns,  shall  have  a 
lien  upon  the  Deposited  Bonds  and  their  avails  and  the  claims  and  other  property  and 
securities  and  the  moneys,  if  any,  under  the  control  of  the  Eeorganization  Committee 
for  its  compensation  and  the  compensation  of  the  Protective  Committee  and  for  all  ex- 
penditures and  advances  made  and  liabilities  incurred  by  it  or  by  the  Protective  Com- 
mittee. 

Sixth. — Upon  the  consummation  of  the  Plan,  Depositors  shall  be  entitled,  upon  com- 
pliance with  all  of  the  terms  and  conditions  of  the  Plan  and  Agreement,  including  pay- 
ment of  such  sums  of  money,  if  any,  as  may  be  required  to  be  paid  pursuant  thereto, 
and  upon  surrender  of  their  certificates  of  deposit  in  negotiable  form,  to  receive  the  new 
securities  to  which  they  shall  respectively  be  entitled  under  the  Plan  and  Agreement, 
but  only  as  and  when  the  same  shall  be  issued  and  ready  for  delivery. 

Seventh. — Subject  to  the  provisions  in  that  behalf  contained  in  the  Plan,  the  times 
within  which  the  cash  payable  by  Depositors  must  be  paid  for  New  Bonds  shall  be  fixed 
by  the  Eeorganization  Committee;  and,  either  generally  or  in  special  instances  and  on 
such  terms  and  conditions,  if  any,  as  it  may  see  fit,  the  Eeorganization  Committee  may 
extend  or  may  renew  any  period  or  periods  so  fixed  or  limited.  The  cash  so  payable 
by  Depositors  must  be  paid  to  the  Depositary,  or  some  duly  authorized  agent  thereof,  for 
account  of  the  Eeorganization  Committee,  and  must  be  receipted  for  by  the  Depositary, 
or  some  such  duly  authorized  agent  on  the  certificates  of  deposit  in  respect  of  which  such 
cash  is  paid,  upon  presentation  of  said  certificates  of  deposit  to  the  Depositary  or  such 
agent  or  on  new  certificates  of  deposit  to  be  issued  in  exchange  for  certificates  so  pre- 
sented. All  Depositors  who  shall  elect  to  purchase  New  Bonds  as  permitted  by  the  Plan 
and  Agreement  severally  and  respectively  agree  that  prompt  payment  of  the  cash  pay- 
able by  them,  respectively,  on  the  terms  of  the  Plan  and  Agreement,  is  an  essential  con- 
dition to  their  acquisition,  respectively,  of  New  Bonds  or  stock  under  the  Plan,  and  that 
any  such  Depositor  who  shall  fail  to  make  prompt  payment  of  any  cash  so  payable,  as 
provided  in  the  Plan  or  in  this  Agreement,  within  any  period  fixed  or  limited  for  such 


29 

payment  in  the  Plan  or  this  Agreement  or  by  the  Reorganization  Committee,  forthwith 
and  without  other  notice  or  action  shall  cease  to  be  entitled  to  receive  any  of  the  new 
securities  provided  for  in  the  Plan  or  any  benefits  hereunder,  and  that  no  such  Deposi- 
tor shall  be  entitled  to  the  return  of  any  Deposited  Bonds  or  the  repayment  of  any 
cash  theretofore  paid  by  him ;  and  that  in  such  event  the  Reorganization  Committee,  in 
its  discretion,  without  any  proceedings  either  at  law  or  in  equity  and  without  demand 
or  notice,  and  in  such  manner  and  on  such  terms  as  it  shall  deem  expedient,  may  at 
public  or  private  sale  or  sales,  for  the  account  of  such  defaulting  Depositor,  dispose  of 
any  or  all  of  the  interests  or  rights  to  which  such  defaulting  Depositor  would  otherwise 
have  been  entitled,  including  all  of  the  New  Bonds  and  all  shares  of  stock  in  the  Hold- 
ing Company  to  which  such  Depositor  would  otherwise  have  been  entitled  and  also  all 
Old  Bonds  and  claims  against  the  Denver  Company,  or  the  avails  thereof,  repre- 
sented by  his  certificate  of  deposit,  and  may  apply  the  proceeds  of  such  sale  or  sales 
to  payment  of  the  costs  and  expenses  thereof  and  of  any  proceeding  looking  thereto  and 
to  the  satisfaction  of  the  obligation  of  such  defaulting  Depositor  hereunder  and  un- 
der his  agreement  to  purchase  New  Bonds  (paying  the  over-plus  if  any  to  such  Depositor), 
and  thereupon  all  interest  and  right  of  such  Depositor  in  any  of  the  securities  or  any 
property  or  rights  so  disposed  of  or  any  avails  thereof  shall  cease  and  determine.  At  any 
public  sale  hereunder  of  any  securities  or  of  any  such  interests  or  rights,  the  Reorgan- 
ization Committee  or  any  other  party  hereto  or  anyone  in  any  manner  connected  with 
said  Committee  or  any  such  party  may  become  the  purchaser  thereof  for  their  or  his  own 
benefit  without  accountability.  The  Reorganization  Committee,  however,  in  its  discre- 
tion, may  waive  such  default,  may  accept  payments  of  overdue  instalments  due  from  any 
Depositor  at  any  time  with  or  without  penalty,  and  may  also  waive  or  limit  any  penalty 
prescribed  either  in  the  Plan  or  Agreement  or  in  pursuance  thereof. 

Eighth. — If  and  when  the  Plan  shall  be  declared  operative  by  the  Reorganization 
Committee,  the  Depositors,  each  for  himself,  hereby  make,  constitute  and  appoint,  the 
parties  of  the  first  part  and  their  successors,  constituting  the  Reorganization  Commit- 
tee for  the  time  being  as  herein  provided,  or  a  majority  of  them,  the  true  and  lawful 
attorneys  of  them  and  each  of  them  for  the  purposes  herein  set  forth,  with  full  power  and 
authority  to  act  for  and  in  the  name,  place  and  stead  of  each  of  them,  and  with  full 
power  of  substitution,  from  time  to  time,  and  of  revocation.  The  Depositors  hereby  irre- 
vocably request  the  Reorganization  Committee  to  endeavor  to  carry  the  Plan  into  practi- 
cal operation  in  its  entirety,  or  with  changes  therein  as  hereinbefore  provided,  or  with 
such  additions,  exceptions  and  modifications  as  shall  be  adopted  as  herein  provided,  and 
the  Depositors  hereby  agree  that  the  Reorganization  Committee  shall  be,  and  it  hereby 
is,  vested  with  all  the  rights,  powers  and  authority  necessary  or  proper  to  enable  it  to 
carry  out  the  Plan  and  Agreement  in  its  entirety,  or  with  such  additions,  exceptions  and 
modifications. 

Ninth. — The  Reorganization  Committee  is  authorized  in  its  discretion  to  demand, 
receive  and  collect  all  amounts  that  may  at  any  time  be  due  or  owing  or  pay- 
able in  respect  of  the  Deposited  Bonds,  any  claims  against  the  Denver  Company  or 
other  securities  or  claims  acquired  by  the  Reorganization  Committee  as  permitted  here- 
by and  whether  such  sums  be  payable  for  principal,  interest  or  otherwise ;  to  elect  or 
cause  any  trustee  or  trustees  under  the  mortgage  securing  the  Old  Bonds  or  any  other 
mortgage  or  trust  indenture,  if  the  foreclosure  of  such  mortgage  or  indenture  shall  in 
its  judgment  be  advisable  for  the  purposes  of  the  reorganization,  to  elect  to  have  the 


30 

principal  of  the  Old  Bonds  or  of  the  obligations  secured  by  any  such  other  mortgage  or  trust 
indenture  become  due  and  payable  and  at  pleasure  revoke  or  withdraw  such  election  or 
cause  the  same  to  be  revoked  or  withdrawn;  to  request  or  instruct  any  such  trustee  or 
trustees  to  prosecute  or  foreclose  or  to  take  any  other  proceedings  for  the  enforcement  of 
the  Old  Mortgage  or  the  Old  Bonds  or  any  such  mortgage  or  trust  indenture  or 
any  bonds  or  obligations  secured  thereby,  or  to  exercise  the  powers  or  any  of  them 
conferred  by  the  Old  Mortgage  or  any  such  mortgage  or  indenture  and  generally 
to  make  any  such  requests  and  demands  and  give  any  such  instructions  upon  or 
to  any  such  trustee  or  trustees  and  to  confirm  and  give  to  such  trustee  or  trustees 
all  such  powers  as  in  the  judgment  of  the  Reorganization  Committee  may  be  advan- 
tageous in  carrying  out  the  Plan;  to  enforce  or  cause  to  be  enforced  the  claims  against 
the  Denver  Company  under  Contract  B  or  any  guaranties  endorsed  upon  Deposited 
Bonds  or  in  favor  of  the  Old  Company;  to  institute  or  to  become  parties  to  or  to  dis- 
miss or  cause  to  be  dismissed  any  legal  proceedings;  to  compromise  any  litigation  now 
or  at  any  time  existing  or  threatening,  in  whole  or  in  part  (except  that  claims  against 
the  Denver  Company  under  Contract  B  or  guaranties  endorsed  upon  any  of  the  Old  Bonds 
shall  not  be  compromised  by  virtue  of  such  power  to  compromise  litigation),  with 
plenary  power  to  enter  into  any  agreement  tending  to  or  deemed  by  it  in  its  discre- 
tion likely  to  promote  the  consummation  of  the  Plan  and  Agreement;  to  give  all  agree- 
ments or  bonds  of  indemnity  or  other  bonds,  and  therewith  to  charge  the  Deposited 
Bonds  and  their  avails,  any  property  purchased  or  new  securities  to  be  issued  here- 
under or  any  or  any  part  of  any  thereof;  to  acquire,  upon  such  terms  and  conditions 
and  at  such  prices  as  it  may  deem  fit,  any  property  deemed  by  it  expedient  for  the 
purposes  or  requirements  of  the  Plan;  to  do  whatever  in  the  judgment  of  the  Reor- 
ganization Committee  may  be  expedient  to  promote  or  procure  the  sale  or  purchase 
as  an  entirety,  or  the  sale  or  purchase  at  separate  sales  or  in  separate  parcels,  of  any 
property  of  the  Old  Company  and  to  sell  and  dispose  of,  upon  such  terms  and  for 
such  consideration  as  the  Reorganization  Committee  may  deem  fit,  any  portion  of  the 
property  of  the  Old  Company  or  of  any  property  acquired  by  the  Committee  or 
in  its  behalf  that  it  shall  deem  unnecessary  for  the  purposes  of  the  reorganiza- 
tion; to  bid  or  to  cause  anyone  else  to  bid  or  to  refrain  from  bidding  at  any  sale, 
either  public  or  private,  of  any  property  whatever,  whether  owned  or  controlled  by  the 
Old  Company  or  otherwise,  to  adjourn  or  consent  to  the  adjournment  of  any  sale  or 
sales,  and  at,  before  or  after  any  sale  or  purchase  to  arrange  and  agree  for  the  resale  of 
any  portion  of  the  property  which  it  may  decide  to  sell  rather  than  to  retain;  to  make  any 
offer,  or  to  cause  or  permit  anyone  else  to  offer,  to  purchase  all  or  any  portion  of  the  prop- 
erty of  the  Old  Company  or  any  other  property,  and,  as  part  of  any  such  offer  or  other- 
wise, to  offer  to  pay  and  to  pay,  or  to  cause  or  permit  to  be  offered  or  paid,  any  amounts 
in  cash  or  otherwise  to  any  bondholders,  creditors  or  other  person  or  persons;  to  hold  any 
property  purchased  either  in  its  name  or  in  the  name  of  any  person  or  corporation  ap- 
proved by  it,  and  to  apply  Old  Bonds  held  by  it  hereunder  or  their  avails  in  satis- 
faction of  any  bid  or  pursuant  to  any  offer  or  contract,  whether  made  by  it  or  any 
other  person  or  corporation  approved  by  it,  or  towards  obtaining  funds  for  the  satisfac- 
tion or  performance  thereof.  The  amount  to  be  paid  or  offered  or  bid  by  the  Reorgan- 
ization Committee,  or  which  it  may  cause  to  be  paid  or  offered  or  bid,  for  any  property 
shall  be  absolutely  discretionary  with  it  and  in  case  of  a  sale  to  others  of  any  property,  the 
Reorganization  Committee  may  receive  out  of  the  proceeds  of  such  sale  or  otherwise  any 
distributive  shares  payable  on  account  of  Deposited  Bonds.  The  Reorganization  Com- 
mittee may  enter  into  any  agreement  or  arrangement  for  decrees  or  orders  for  facili- 
tating or  hastening  the  course  of  litigation  or  tending  towards  or  deemed  by  the  Com- 


31 

mittee  likely  to  promote  the  consummation  of  the  Plan;  it  may  apply  for  or  consent  to 
the  appointment  or  reappointment  of  any  receiver  or  receivers  of  the  Old  Company  or 
of  any  corporation  in  which  the  Depositors  as  such  may  be  interested  or  against  which 
it  may  hold  demands,  or  of  the  property  of  any  such  corporation  or  the  extension  of 
any  receivership,  or  it  may  apply  for  or  consent  to  the  removal  of  any  receiver  or  receiv- 
ers and  the  substitution  of  one  or  more  other  receivers  or  the  termination  of  any  receiv- 
ership and  the  delivery  of  the  property  subject  thereto  to  its  owners ;  it  may  consent  to 
the  issue  and  sale  of  receiver's  certificates  or  other  obligations  and  to  the  securing  of  any 
receiver's  certificates  so  issued  by  such  liens  or  charges  upon  all  or  any  of  the  property 
of  the  Old  Company  and  having  such  priorities  as  it  may  approve.  It  may  lend  money  to 
the  Receivers  of  the  Old  Company  or  to  the  Holding  Company  or  the  Operating  Com- 
pany and  loan  money  in  its  discretion  for  any  of  the  purposes  of  the  Plan  and  Agreement. 

The  Reorganization  Committee  may  also  borrow  and  use  such  sums  of  money  on 
such  terms  and  subject  to  such  conditions  as  in  its  discretion  it  may  deem  wise  or  neces- 
sary in  order  to  carry  out  the  Plan  or  to  protect  the  interests  of  the  Depositors  and  for 
that  purpose  and  to  secure  such  sums  as  may  be  so  borrowed  with  interest  it  may  pledge, 
hypothecate  or  otherwise  create  charges  upon  any  or  all  of  the  Deposited  Bonds  or  their 
avails,  property  purchased  or  the  new  securities  to  be  created  as  contemplated  by  the 
Plan  and  all  moneys  paid  by  the  Depositors  or  by  any  Underwriting  Syndicate.  .In  case 
of  any  such  borrowing,  whether  upon  pledge  or  not,  the  Reorganization  Committee  may 
give  to  the  lender  for  the  sum  so  borrowed  the  promissory  note  or  notes  of  the  Reor- 
ganization Committee  signed  on  behalf  of  such  Committee  by  its  Chairman  or  otherwise 
as  may  be  authorized  by  the  Committee. 

The  Reorganization  Committee  shall  have  the  sole  control,  discretion  and  manage- 
ment of  the  Plan  and  its  execution.  It  may  make  such  expenditures  and  incur  such  obli- 
gations and  liabilities,  and  do  such  acts  as  in  its  absolute  discretion  it  may  deem  judicious 
and  proper  in  order  to  carry  out  fully  and  effectively  the  purposes  of  the  Plan  and  of 
this  Agreement,  and  it  may,  or  the  Protective  Committee  with  its  consent  may,  exercise 
any  powers  of  the  Protective  Committee  under  the  Protective  Agreement.  Statements 
in  the  Plan  and  Agreement  of  the  intended  arrangements  or  as  to  the  methods  to  be  em- 
ployed in  effecting  the  details  of  the  proposed  reorganization  shall  not  limit  the  discre- 
tion of  the  Reorganization  Committee,  but  may  be  modified  or  changed  or  departed  from 
or  entirely  abandoned  as  often  as  the  Committee  shall  deem  advisable,  it  being  intended 
that  the  Reorganization  Committee  shall  have  full  discretion  and  power  to  use  what- 
ever means  it  shall  deem  most  convenient  and  advisable  for  accomplishing  the  reorgan- 
ization, the  acquisition  of  any  property,  directly  or  indirectly,  and  the  issue  and  dispo- 
sition of  the  new  securities  and  the  other  objects  contemplated  by  the  Plan  and  Agree- 
ment. Anything  which  anywhere  in  the  Plan  and  Agreement  it  is  provided  the 
Reorganization  Committee  may  do  or  allow  to  be  done  it  may  do  or  allow  to  be  done 
by  or  through  such  agents  or  agencies  as  it  may  determine,  or  by  or  through  others 
with  its  approval  or  consent  or  acquiescence,  or  it  may  contract  with  any  other  person 
or  corporation  that  any  such  thing  shall  be  done  or  permitted  to  be  done. 

The  Reorganization  Committee  in  carrying  out  the  Plan  may  organize  or  procure 
to  be  organized  one  or  more  companies  or  it  may  adopt  or  use  any  companies  whether 
now  existing  or  not.  It  may  make  or  cause  to  be  made  consolidations,  mergers,-  sales, 
purchases,  leases,  guaranties  or  other  arrangements  by  or  between  any  such  companies, 
any  of  the  companies  mentioned  in  the  Plan  or  any  companies  thereby  permitted  to  be 
employed  in  connection  with  the  reorganization ;  it  may  make  or  cause  to  be  made  con- 
veyances and  transfers  of  the  property  or  securities  acquired  by  it  or  with  its  appro- 


32 

val,  and  may  cause  the  ownership  of  all  or  any  property  by  the  Operating  Company 
or  the  Holding  Company  to  be  either  direct  ownership  or  ownership  through  the 
ownership  of  bonds  or  stocks  or  both  of  any  other  company,  and  may  cause  the  New 
Mortgage  to  be  either  a  direct  lien  upon  any  particular  property  or  a  lien  upon  the 
bonds  or  stocks  or  both  of  any  company  owning  such  property;  and  all  of  the  provi- 
sions of  the  Plan  and  Agreement  shall  equally  apply  to  and  in  respect  of  any  physical 
properties  embraced  in  the  reorganization  and  to  and  in  respect  of  securities  represent- 
ing any  such  property,  it  being  intended  that  for  all  purposes  of  the  Plan  and  Agree- 
ment any  such  property  and  any  securities  representing  such  property  may  be  treated 
or  accepted  by  the  Eeorganization  Committee  in  its  discretion  as  substantially  identical. 
It  may  take  or  allow  to  be  taken  such  other  proceedings  as  it  may  deem  proper  for  the 
purpose  of  the  creation  of  the  new  securities  provided  for  in  the  Plan  and  Agreement 
and  the  carrying  out  of  any  of  the  provisions  thereof.  The  Eeorganization  Committee 
may  pay  the  expense  of  listing  certificates  of  deposit  or  any  new  securities  to  be  issued 
under  the  Plan  and  Agreement  upon  the  New  York  Stock  Exchange  or  elsewhere,  and 
any  taxes,  fees  or  charges  payable  in  connection  therewith,  and  as  well  any  taxes,  fees 
or  charges  imposed  by  any  public  authority  wherever  situated  in  respect  of  the  authori- 
zation, creation,  issue,  transfer  or  distribution  of  all  or  any  of  the  new  securities  or 
other  securities  under  the  control  of  the  Reorganization  Committee,  as  provided  or  per- 
mitted by  the  Plan  and  Agreement,  and  it  may  pay  or  discharge  any  taxes,  fees  or  gov- 
ernmental charges  payable  in  connection  with  the  deposit,  use,  assignment  or  trans- 
fer of  Old  Bonds  under  or  in  pursuance  of  the  Plan  and  Agreement. 

The  Reorganization  Committee  may  prescribe  or  approve  the  form  and  terms  of 
all  charters  and  by-laws  of  the  Operating  Company  and  of  the  Holding  Company  and  of 
any  other  corporations  that  shall  be  utilized  in  the  reorganization,  and  all  certificates 
of  stock  and  bonds  at  any  time  to  be  issued  and  the  New  Mortgage  and  all  other  instru- 
ments to  be  executed,  and  may  make  contracts  with  regard  to  the  form  thereof.  The 
Reorganization  Committee  may  create  and  provide  for  all  necessary  trusts  and  may 
appoint  trustees  thereunder.  The  Reorganization  Committee  may  in  its  discretion  set 
apart  and  hold  in  trust  or  permit  or  cause  to  be  set  apart  and  held  in  trust  with  any  trust 
company  or  otherwise  any  part  of  the  new  securities  to  be  issued  and  any  cash  which  may 
be  received  from  the  Depositors  or  any  syndicate  or  from  sales  of  New  Bonds  or  stock 
or  otherwise  as  it  may  deem  suitable  for  the  purpose  of  securing  the  application  thereof 
to  any  of  the  purposes  of  the  Plan  and  Agreement. 

It  may  make  or  cause  to  be  made  any  underwriting  agreement  with  any  syndi- 
cate or  otherwise  which  it  may  deem  advisable  to  insure  or  promote  the  carrying  out  of 
the  Plan  and  Agreement  or  any  portion  thereof,  including  not  only  any  agreement  or  ar- 
rangement for  the  sale  or  the  underwriting  of  the  sale  of  New  Bonds  and  of  stock  to  be 
issued  pursuant  to  the  Plan  and  Agreement,  but  as  well  any  agreement  or  arrangement  for 
the  purpose  of  obtaining  money  for  the  purposes  of  the  Plan  whereby  the  new  stock  to 
which  holders  of  such  Old  Bonds  who  shall  not  be  Depositors  would  have  been  entitled  if 
they  had  become  parties  to  the  Plan  and  Agreement  or  any  other  new  securities  author- 
ized by  the  Plan  and  Agreement  and  not  otherwise  appropriated  or  all  such  securities 
shall  be  sold  or  the  sale  thereof  shall  be  underwritten,  and  they  may  provide  for  the  pay- 
ment to  any  such  syndicate  or  any  syndicate  organized  pursuant  to  the  authority  con- 
tained or  as  stated  in  the  Plan  and  Agreement  of  reasonable  compensation  and  likewise 
for  the  payment  of  compensation  to  bankers  or  managers  whom  the  Protective  Commit- 
tee has  procured  or  the  Reorganization  Committee  may  procure  to  organize  or  with  whom 
they  may  agree  for  the  organization  of  any  such  syndicate;  and  for  the  performance  of 


33 

any  agreement  entered  into  by  the  Protective  Committee  or  by  it,  the  [Reorganization 
Committee  may  charge  the  Deposited  Bonds,  the  property  purchased  and  the  new  securi- 
ties to  be  issued  hereunder. 

The  Reorganization  Committee  may  dispose  of  or  consent  to  the  disposition  of  any 
of  the  new  securities  not  required  for  delivery  to  Depositors  or  to  the  Underwriting  Syn- 
dicate, or  the  securities  of  any  company  which  shall  be  utilized  in  the  reorganization 
not  reserved  under  the  Plan  for  specific  uses;  and  it  may  use,  or  allow  to  be  used,  the 
proceeds  thereof,  if  required  for  the  purpose  of  carrying  out  the  reorganization,  in  such 
manner  as  it  may  deem  expedient  and  advisable  for  the  purposes  of  the  Plan. 

The  Reorganization  Committee  shall  have  power  to  make  equitable  provision  for  any 
case  of  lost  or  destroyed  bonds,  certificates  of  stock,  certificates  of  deposit  or  other  se- 
curities and  to  provide  for  and  make  such  issues  of  scrip  or  convertible  securities  as  it 
shall  deem  expedient  properly  to  represent  any  fractional  interest  in  the  New  Bonds  or 
the  stock  to  be  issued  under  the  Plan,  and  it  may  in  its  discretion  settle  for  and  adjust 
any  such  fractional  interest  in  cash.  In  case  it  shall  deem  it  advisable  for  any  reason  it 
may  issue  or  authorize  the  issue  of  temporary  or  interim  certificates  to  represent  new 
securities. 

All  moneys  at  any  time  held  under  the  Plan  and  Agreement  shall  be  subject  to  the  order 
of  the  Reorganization  Committee,  which  shall  apply  the  same  or  cause  or  permit  the  same 
to  be  applied  for  any  of  the  purposes  of  the  Plan  as  from  time  to  time  may  be  deter- 
mined by  it;  its  determination  as  to  the  propriety  and  purpose  of  any  such  application 
shall  be  final,  and  nothing  in  the  Plan  shall  be  understood  as  limiting  or  requiring 
the  application  of  specific  moneys  to  specific  purposes.  The  Reorganization  Committee 
may,  if  in  its  judgment  such  course  shall  be  in  the  interest  of  the  Operating  Company 
or  the  Holding  Company,  abandon  any  particular  purpose  or  purposes  for  which  money 
is  appropriated  in  the  Plan  and,  within  the  limitations  and  subject  to  the  conditions 
expressly  prescribed  in  Article  V  of  the  Plan,  may  provide  for  the  application  of  any 
of  the  moneys,  to  be  raised  as  contemplated  by  the  Plan,  to  any  of  the  purposes  men- 
tioned in  said  Article  V  and  in  such  amounts  or  proportions,  respectively,  as  may  be  de- 
termined by  the  Committee. 

The  Reorganization  Committee  may  acquire,  pay,  compromise,  settle,  surrender  or 
release  any  obligations  or  indebtedness  of,  or  claims  against,  the  Old  Company,  or  any 
claims  or  demands  against  or  liens  or  charges  upon  any  property  of  the  Old  Company,  or 
upon  any  other  property  which  the  Reorganization  Committee  may  deem  it  advisable  for 
the  Operating  Company  or  the  Holding  Company  to  acquire,  or  any  claims  or  demands 
whereby,  or  by  reason  whereof,  any  such  property  may  be  encumbered  or  the  title  thereto 
affected,  or  any  Receiver's  certificates  or  other  obligations  or  liabilities  incurred  01 
which  may  be  issued  or  incurred  by  the  Receivers  of  the  Old  Company,  and  for  such  pur 
pose  may  use  any  cash  provided  by  the  Plan  or  any  new  securities  which  it  is  pro- 
vided in  the  Plan  may  be  issued  in  the  course  of  the  reorganization  and  which  are  not 
otherwise  appropriated  in  the  Plan.  It  may  surrender  or  cancel,  or  consent  to  the  sur- 
render or  cancellation  of  or  may  adopt  or  consent  to  the  adoption  or  renounce  or  consent 
to  the  renunciation  of  any  agreement  to  which  the  Old  Company  is  a  party  or  the  Receiv 
ers  of  the  Old  Company  are  parties.  It  may  compromise,  settle,  surrender  or  release  or 
consent  to  the  compromise,  settlement,  surrender  or  release  of  any  claims  of  the  Old 
Company  or  of  its  Receivers  (but  claims  against  the  Denver  Company  under  Contract  B 
or  guaranties  endorsed  on  Old  Bonds  acquired  from  the  Depositors  under  the  Plan  and 
Agreement  may  be  compromised  or  settled  by  the  Reorganization  Committee,  if  at  all, 


34 

only  by  virtue  of  the  power  conferred  and  within  the  limitations  prescribed  in  Article  II 
of  the  Plan  and  as  provided  hereinafter  in  this  Article  Ninth). 

Generally  the  Reorganization  Committee  may  make  or  ratify  or  permit  to  be  made  or 
ratified  contracts  with  any  person,  syndicate,  committee  or  corporation  in  respect  of  any 
matter  connected  with  the  Plan  and  Agreement. 

The  Reorganization  Committee  may  employ  counsel,  depositaries,  agents  and 
all  necessary  assistants  and  may  incur,  agree  with  respect  to  and  discharge  any 
and  all  expenses  and  obligations  which  it  deems  reasonable  for  the  purposes  of 
the  Plan  or  for  carrying  out  or  attempting  to  carry  out  the  same,  all  expenses 
in  connection  with  the  preparation  of  the  Plan  and  Agreement,  the  issue  of  certifi- 
cates, all  expenses  of  organizing  the  Operating  Company  and  the  Holding  Company  and 
any  other  company  or  companies  utilized  in  connection  with  the  reorganization,  the  issue 
and  transfer  of  property  and  securities,  legal  expenses,  expenses  for  advertising  and  print- 
ing, all  expenses  of  or  incident  to  the  receivership  of  the  Old  Company  and  the  fore- 
closure of  the  mortgage  securing  the  Old  Bonds,  all  expenses  incurred  hereunder  or  under 
the  Protective  Agreement  the  compensation  and  obligations  and  liabilities  of  the 
Protective  Committee,  and  all  other  expenses  in  any  manner  connected  with  the 
Plan  and  Agreement  or  which  the  Committee  may  deem  it  expedient  to  incur  or  pay  in 
undertaking  to  promote  or  in  effecting  any  of  the  purposes  thereof.  The  Committee  shall 
be  the  sole  judge  of  the  propriety  or  expediency  of  any  and  all  expenses  and  of  the  amount 
thereof. 

The  Reorganization  Committee  may  proceed  under  the  Plan  and  Agreement  or  any 
part  thereof  with  or  without  judicial  sale,  and  in  case  of  judicial  sale  it  may  exercise  any 
power  either  before  or  after  sale.  Any  action  contemplated  in  the  Plan  and  Agreement 
may  be  performed  before  or  after  reorganization,  and  any  such  action  may  be  taken  by 
the  Reorganization  Committee  or  by  anyone  approved  by  it  at  any  time  when  it  shall 
deem  the  reorganization  advanced  sufficiently  to  justify  such  course  and  as  it  may  deem 
necessary  the  Reorganization  Committee  may  defer  or  permit  to  be  deferred  the  per- 
formance of  any  provision  of  the  Plan  or  Agreement  or  may  commit  such  performance 
to  the  Operating  Company  or  the  Holding  Company  or  such  other  person,  persons  or  cor- 
poration as  it  shall  determine  and  may  cause  any  such  company  to  pay  any  indebtedness 
authorized  or  incurred  by  the  Reorganization  Committee  or  otherwise  in  furtherance  of 
the  Plan  and  to  assume  any  obligations  which  in  its  judgment  may  be  necessary  or 
proper  to  carry  out  the  Plan  and  Agreement ;  and  pending  the  completion  of  the  reorgan- 
ization, if  in  its  judgment  occasion  shall  require,  the  Reorganization  Committee  notwith- 
standing any  other  provision  of  this  Agreement,  may  exercise,  but  only  upon  the  affirma- 
tive vote  or  concurrent  action  of  three-fourths  of  all  its  members,  any  of  the  powers 
which  by  the  terms  of  the  Plan  are  to  be  vested  in  or  may  be  exercised  by  the  Holding 
Company  or  by  the  Operating  Company. 

In  the  event  that  any  agreement  or  arrangement  providing  for  compromise  or  set- 
tlement of  claims  against  the  Denver  Company  shall  be  made  in  the  exercise  of  the 
power  last  conferred,  the  same  shall  be  made,  and  shall  be  subject  to,  the  condition  that 
such  compromise  or  settlement  shall  be  submitted  to  the  Depositors,  registered  as  such 
upon  the  books  of  the  Depositary,  and  shall  not  be  disapproved  by  more  than  one-third 
in  amount  thereof.  In  the  event  of  the  making  of  any  such  agreement  or  arrangement, 
a  statement  of  the  proposed  compromise  or  settlement,  setting  forth  the  terms  thereof, 
shall  be  filed  with  the  Depositary  and  with  each  of  its  agents  then  authorized  to  accept 
deposits  under  the  Plan  and  Agreement,  which  statement  shall  be  subject  to  inspection 
by  Depositors,  and  notice  of  the  filing  thereof  shall  be  published  as  provided  in  Article 


35 

Fifteenth  hereof.  Any  Depositor  desiring  to  disapprove  such  compromise  or  settlement 
may  within  four  weeks  from  the  date  of  the  first  publication  of  said  notice,  file  with  the 
Depositary  or  with  any  of  its  said  authorized  agents,  a  writing  stating  that  he  disap- 
proves the  same.  Any  Depositor  who  shall  fail  so  to  file  such  written  disapproval  within 
the  time  so  limited  shall  be  conclusively  deemed  to  have  consented  to  such  compromise  or 
settlement  notwithstanding  any  objection  thereto  that  he  may  make  in  any  other  man- 
ner; and  such  compromise  or  settlement  shall  be  binding  upon  all  the  Depositors  as  fully 
as  if  every  Depositor  had  expressly  consented  thereto  unless  more  than  one-third  in 
amount  of  all  of  the  Depositors,  registered  as  such  upon  the  books  of  the  Depositary,  shall 
in  writing  disapprove  the  same  in  the  manner  and  within  the  period  aforesaid.  In  case 
more  than  one-third  in  amount  of  said  Depositors  shall  so  disapprove  such  compromise 
or  settlement,  the  same  shall  be  without  any  force  whatsoever  and  shall  not  be  consum- 
mated by  the  Reorganization  Committee. 

Tenth. — The  Protective  Committee  and  the  Depositary  under  the  Protective  Agree- 
ment, upon  notice  from  the  Reorganization  Committee  that  the  Plan  has  become  opera- 
tive, will  deliver  to  or  hold  subject  to  the  order  of  the  Reorganization  Committee,  and 
will  assign,  transfer  and  deliver  as  shall  be  directed  by  any  such  order,  all  of  the  De- 
posited Bonds  and  coupons  subject  to  the  Protective  Agreement,  the  holders  whereof  or  of 
certificates  of  deposit  wherefor  shall  have  become  bound  by  the  Plan  and  Agreement,  all 
claims  against  the  Denver  Company  that  may  have  been  subject  to  the  Protective  Agree- 
ment and  all  avails  of  any  such  bonds  or  claims  and  all  other  securities  and  benefits  what- 
soever subject  to  the  control  of  the  Protective  Committee ;  and  the  Protective  Committee, 
with  respect  to  all  such  Deposited  Bonds  and  coupons,  claims,  securities  and  benefits,  shall 
at  any  time  exercise  any  or  all  of  its  powers  or  rights  under  the  Protective  Agreement,  as 
may  be  requested  by  the  Reorganization  Comittee,  for  the  purpose  of  carrying  out  any 
of  the  provisions  of  the  Plan  and  Agreement  or  the  intent  or  any  of  the  purposes 
thereof. 

Eleventh. — The  Reorganization  Committee  undertakes  in  good  faith  to  endeavor  to 
execute  the  Plan,  either  in  its  original  form  or  as  the  same  shall  be  modified  as  provided 
herein,  but  neither  the  Reorganization  Committee  nor  the  Protective  Committee, 
assumes  any  personal  responsibility  for  the  execution  thereof  or  for  the  result  of  any 
steps  taken  or  acts  done  for  the  purposes  thereof.  The  Reorganization  Committee  may 
act  by  any  sub-committee  or  Board  of  Managers  or  by  other  agents,  and  may  delegate 
authority  to  any  such  sub-committee,  Board  of  Managers  or  agents  to  carry  out  the  pro- 
visions of  the  Plan,  and  the  members  of  any  such  sub-committee  or  Board  of  Managers 
or  any  such  agent  may  be  allowed  reasonable  compensation  for  services.  Neither  the  Re- 
organization Committee  nor  the  Protective  Committee  nor  any  member  of  either  of  said 
committees,  nor  the  Depositary,  shall  be  personally  liable  for  any  act  or  omission  of  any 
agent  or  employee  selected  by  them,  or  any  of  them,  nor  for  any  action  taken  or  not 
taken  in  good  faith  in  the  belief  that  any  Deposited  Bond  or  New  Bond  or  certificate  of 
stock  or  of  deposit  or  other  instrument  or  any  signature  is  genuine  or  effective,  nor 
for  anything  done  or  not  done  under  the  advice  of  counsel,  nor  for  any  error  of  judg- 
ment nor  mistake  of  law  or  fact,  nor  for  anything  except  its  or  his  own  individual 
wilful  misconduct  or  bad  faith,  and  neither  the  Reorganization  Committee  nor  the  Pro- 
tective Committee  nor  any  member  of  either  of  said  committees  nor  the  Depositary 
shall  be  personally  liable  for  the  acts  or  defaults  of  any  other  person  or  body. 

The  accounts  of  the  Reorganization  Committee  are  to  be  filed  with  the  Board 
of    Directors    of    the    Holding    Company.     The    accounts    when    approved    by    disin- 


36 

terested  public  accountants  to  be  designated  and  employed  by  said  Board  of  Directors 
sball  be  final,  binding  and  conclusive  upon  all  parties  having  any  interest  therein,  and  upon 
such  approval  whenever  given  the  Eeorganization  Committee  shall  be  discharged  and  any 
liability  upon  its  part  shall  cease.  The  acceptance  of  new  securities  by  any  Depositor  shall 
estop  the  person  accepting  the  same  from  questioning  the  conformity  of  such  securities 
in  any  particular  with  any  of  the  provisions  of  the  Plan,  and  the  acceptance  of  new  securi- 
ties by  the  holders  of  a  majority  in  amount  of  the  Depositors  shall  so  estop  all  Deposi- 
tors and  constitute  full  ratification  of  all  of  the  accounts,  acts  and  proceedings  of  the  Re- 
organization Committee  and  the  Protective  Committee  and  a  release  and  discharge  of  the 
Reorganization  Committee  and  the  Protective  Committee  and  all  of  the  members  of  each 
thereof  and  the  Depositary  from  all  liability  and  accountability  of  every  kind,  character 
and  description  whatsoever. 

Twelfth. — The  Reorganization  Committee,  by  vote  of  three-fourths  of  its  members 
as  the  Committee  shall  then  be  constituted,  may  at  any  time  increase  the  number  of 
members  constituting  the  Reorganization  Committee  and  appoint  additional  members, 
and  the  member  or  members  so  elected  shall  have  all  the  powers  of,  and,  together 
with  those  herein  named  and  their  successors  respectively,  shall  constitute  the  Reorgani- 
zation Committee,  with  like  force  and  effect  as  if  they  were  specially  named  herein,  and 
the  Reorganization  Committee  may  by  like  vote  fill  any  vacancy,  but  need  not  necessarily 
do  so,  and  the  Committee  as  at  any  time  constituted,  notwithstanding  any  vacancy,  shall 
have  all  the  powers,  rights,  property  and  interests  of  the  Committee  as  originally  formed 
or  theretofore  existing.  Any  member  of  the  Reorganization  Committee  may  resign  by 
giving  notice  of  his  resignation  in  writing  to  the  chairman  of  the  Reorganization  Commit- 
tee or  to  a  majority  of  the  other  members.  The  Reorganization  Committee  may  settle  any 
account  or  transaction  with  any  member  who  shall  have  resigned  or  be  under 
other  disability  to  act  or  with  the  representatives  of  any  deceased  member,  and 
give  or  receive  a  full  release  and  discharge  with  reference  thereto.  The  Reorgani- 
zation Committee  may  elect  one  of  its  members  to  be  Chairman  of  the  Commit- 
tee, may  appoint  a  Secretary,  who  need  not  be  a  member  of  the  Committee,  may 
prescribe  regulations  for  its  meetings  and  the  convening  thereof,  and  may  keep 
a  record  of  its  acts  and  proceedings.  Except  as  herein  otherwise  provided,  the  affirma- 
tive vote  of  a  majority  of  the  members  of  the  Reorganization  Committee,  as  at  any  time 
constituted,  shall  be  necessary  and  sufficient  for  the  passage  of  any  resolution  or  the 
taking  of  any  other  action  (but  a  member  may  vote  by  proxy — who  may  or  may  not  be 
another  member  of  the  Committee — at  any  meeting  of  the  Reorganization  Committee), 
and  such  affirmative  vote  of  the  majority,  except  as  aforesaid,  shall  be  binding  upon  the 
Reorganization  Committee  and  the  Depositors.  It  shall  not  be  necessary  for  the  members 
of  the  Reorganization  Committee  formally  to  meet  in  order  to  take  any  action  provided 
they  agree  on  any  matter  and  embody  such  agreement  in  any  form  of  writing  signed  by 
every  member  of  the  Reorganization  Committee. 

All  members  of  the  Reorganization  Committee  shall  be  entitled  to  compensation  for 
their  services. 

The  Reorganization  Committee  and  any  member  thereof  and  the  Depositary  and 
any  officer  or  director  thereof  and  anyone  connected  with  the  Reorganization  Commit- 
tee or  with  any  of  the  members  thereof  or  with  the  Depositary  or  with  the  Operating  Com- 
pany or  the  Holding  Company  or  with  any  other  company  mentioned  or  referred  to  here- 
in (whether  as  member,  incorporator,  stockholder,  director,  officer  or  in  any  capacity) 
and  any  Depositor  or  any  transferee  of  any  Depositor  and  any  partnership  or  corpora- 


37 

tio.i  with  which  any  person  above  mentioned  may  be  connected  in  any  manner  may  be  or 
become  pecuniarily  interested,  without  accountability  in  respect  thereof,  in  any  contract, 
transaction,  property  or  matter  with  which  the  Plan  or  Agreement  or  the  Operating  Com- 
pany or  the  Holding  Company  or  any  other  company  or  any  committee  mentioned  or 
referred  to  herein  are  concerned,  including  participation  in  any  syndicate  agreement 
whether  or  not  mentioned  in  the  Plan.  Any  such  person  or  corporation  may  also  become 
a  Depositor  under  the  Plan  and  Agreement,  and  in  such  event  shall  have  the  same  rights, 
benefits  and  obligations  hereunder  and  in  respect  of  all  Old  Bonds  deposited,  all  claims 
transferred,  all  property  purchased,  all  securities  of  the  Operating  Company  or  the 
Holding  Company  to  be  issued  or  received,  and  all  payments  to  be  made,  as  other  Deposi- 
tors in  like  case,  and  may  buy  and  sell  certificates  of  deposit  and  undeposited  Old  Bonds 
in  the  same  manner  and  with  the  same  rights  as  any  one  not  a  Depositor. 

The  Reorganization  Committee  may  form  or  procure  the  formation  of  any 
syndicate  or  syndicates  which  it  may  deem  necessary  or  advantageous  for  carry- 
ing out  the  purposes  of  the  Plan  or  of  this  Agreement  and  any  of  the  members  of 
the  Reorganization  Committee  may  act  as  members  or  managers  of  any  such  syndicate 
or  syndicates.  The  terms  of  any  agreement  forming,  and  of  all  agreements  with,  any 
such  syndicate  may  be  fixed  by  the  Reorganization  Committee,  and  as  so  fixed  shall  be 
binding  and  conclusive  upon  the  Depositors.  The  syndicate  managers,  whether  or  not 
members  of  the  Reorganization  Committee  may  receive  compensation  as  such  syndicate 
managers,  and  syndicate  managers  who  may  be  members  of  the  Reorganization  Com- 
mittee may  receive  also  compensation  as  members  of  the  Reorganization  Committee. 

The  Reorganization  Committee  may  remove  and  in  such  event  or  in  the  event  of  its 
resignation  or  incapacity  may  appoint  a  successor  to  the  Depositary.  Any  direction 
given  by  the  Reorganization  Committee,  evidenced  by  a  writing  signed  by  the 
Chairman  or  certified  by  the  Secretary  thereof,  shall  be  full  and  sufficient  author- 
ity for  any  action  of  the  Depositary  or  of  any  other  custodian  or  of  any  committee  or 
agent.  The  Depositary  shall  incur  no  liability  for  anything  done  or  permitted  at  the 
request  or  direction  of  the  Reorganization  Committee. 

Thirteenth. — The  enumeration  of  specific  powers  hereby  conferred  shall  not  be  con- 
strued to  limit  or  to  restrict  the  general  powers  herein  conferred  or  intended  so  to  be, 
and  it  is  hereby  declared  that  it  is  intended  to  confer  on  the  Reorganization  Com- 
mittee in  all  respects  any  and  all  powers  which  the  Reorganization  Committee  may 
deem  necessary  or  expedient  in  or  towards  carrying  out  or  promoting  in  any  respect  the 
purposes  of  the  Plan  and  Agreement  as  now  existing  or  as  the  same  may  be  modified 
as  herein  provided,  even  though  any  such  power  be  apparently  of  a  character  not  now 
contemplated,  and  the  Reorganization  Committee  may  exercise  any  and  every  such 
power  as  fully  and  effectively  as  if  the  same  were  herein  specified  and  as  often  as  for 
any  cause  or  reason  it  may  deem  expedient. 

Fourteenth. — No  right  is  conferred  or  created  hereby  nor  is  any  trust,  liability  or  obli- 
gation (except  the  agreements  herein  contained  in  favor  of  Depositors  and  of  the  Re- 
organization Committee,  the  Protective  Committee  and  the  Depositary)  created  by  the 
Plan  and  Agreement  or  assumed  hereunder  by  or  for  the  Operating  Company  or  the 
Holding  Company,  or  in  favor  of  any  creditor  or  of  any  holder  of  any  claim  whatsoever 
against  the  Old  Company  or  in  favor  of  any  other  company  now  existing  or  to  be  formed 
hereafter  or  in  favor  of  any  person  or  corporation  whatsoever,  with  respect  to  any 
Deposited  Bonds  or  coupons  or  any  claims  against  the  Denver  Company  or  any  moneys 
paid     to     or    received    by    the     Reorganization    Committee    or    by    the    Depositary 


38 

hereunder  or  with  respect  to  any  property  acquired  by  purchase  at  any  sale 
or  otherwise  acquired  or  with  respect  to  any  new  securities  to  be  issued  under 
the  Plan  or  with  respect  to  any  other  matter  or  thing,  but  this  Agreement  shall  be  con- 
strued as  strictly  an  agreement  between  the  parties  and  as  solely  affecting  and  relating 
to  the  Eeorganization  Committee,  the  Protective  Committee,  the  Depositary  and  Depositors 
hereunder.  The  Deposited  Bonds  and  claims  against  the  Denver  Company  and  all 
property,  securities,  claims,  demands  and  rights  acquired  pursuant  to  the  Plan  and  Agree- 
ment shall  remain  in  full  force  and  effect  for  all  purposes  and  shall  not  be  deemed 
merged,  satisfied  or  discharged,  and  no  legal  right  or  lien  shall  be  deemed  released  or 
waived  unless  the  same  shall  be  specifically  provided  for  by  affirmative  action  of  the 
Reorganization  Committee  as  permitted  hereby;  and  all  such  claims,  demands  and  rights 
may  be  enforced  by  the  Eeorganization  Committee  or  by  anyone  to  whom  the  same  may 
be  assigned,  as  provided  herein,  with  authority  conferred  by  the  Eeorganization  Com- 
mittee for  the  enforcement  thereof. 

Fifteenth.— All  calls  for  payments  to  be  made  under  the  Plan  or  for  the  surrender 
or  presentation  of  certificates  of  deposit  issued  hereunder  or  under  the  Protective  Agree- 
ment, all  notices  fixing  or  limiting  any  period  for  the  deposit  or  withdrawal  of  securities 
or  for  the  taking  of  any  action  or  for  payments  and  all  other  calls  and  notices  hereunder 
shall  be  inserted  in  at  least  two  daily  newspapers  published  in  the  City  of  New  York  and 
in  at  least  one  daily  newspaper  published  in  the  City  and  County  of  San  Francisco, 
twice  in  each  week  for  two  successive  calendar  weeks  in  each  case  on  any  days  of  the 
week.  Any  call  or  notice  whatsoever  when  so  published  by  the  Committee  shall  be  taken 
and  considered  as  though  personally  served  upon  all  parties  to  be  bound  thereby  as  of 
the  respective  dates  of  insertion  thereof,  and  such  publication  shall  be  the  only  notice 
required  to  be  given  under  any  provision  of  the  Plan  and  Agreement. 

Sixteenth. — The   Plan   and   this   Agreement  shall  bind  and  benefit  the  several  par- 
ties and  their  and  each  of  their  survivors,    successors,    executors,    administrators  and 
gns. 

A  printed  copy  of  this  Agreement  signed  by  the  members  of  the  Protective  Commit- 
tee or  three-fourths  of  them  and  by  the  members  of  the  Reorganization  Committee  or  a 
majority  of  them  and  lodged  with  The  Equitable  Trust  Company  of  New  York  shall  be 
hold  and  taken  to  be  the  original  Agreement.  This  Agreement  may,  however,  be  exe- 
cuted in  any  number  of  counterparts  with  the  same  effect  as  if  all  of  the  parties  execut- 
ing the  same  had  executed  but  one  instrument. 

In  Witness  Whereof,  the  undersigned  members  of  the  Protective  Committee  and  of 
the  Eeorganization  Committee  have  caused  these  presents  to  be  duly  executed  the  day  and 
year  first  above  written  and  the  parties  of  the  second  part  have  become  parties  hereto 
in  the  manner  herein  provided. 

Alvin  W.  Keech, 

Chairman. 

C.  Ledyaed  Blaie,  Alvin  W.  Keech, 

I.  de  Brtjyn,  A.  M.  Hunt, 


39 


P.  II.  ECKEB, 

David  R.  Forgan, 

A.  M.  Hunt, 

Stabb  J.  Murphy, 

James  D.  Phelan, 

W.  A.  Eead, 

William  Salomon, 

George  Whittell, 

Richabd  B.  Young, 

Protective  Committee. 


Lyman  Rhoades, 


Secretary. 


James  D.  Phelan, 

Geoege  Whittell, 

David  R.  Fobgan, 

I.  de  Bbuyn, 

C.  Ledyaed  Blaib, 

F.  H.  Ecker, 

Starr  J.  Murphy, 

W.  A.  Read, 

William  Salomon, 

Richard  B.  Young, 

Reorganization  Committee. 


UNIVEBSITy  °*  CALIFOBNlA  LIBBARY 
BERKELEY  BY 


SEP2  4J974 

dRCULATJOWDEPT. 


SOm-7,'16 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


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